The Polish tax system could be in for a revolution. The Ministry of Finance has announced draft changes aimed at simplifying, streamlining and, in some areas, tightening the rules for dealing with the tax authorities. We look at these plans and consider how they may affect the day-to-day operations of businesses. Is this a step towards greater transparency or just another tax hurdle?
Tax proceedings
The planned changes are intended to improve tax proceedings and adapt them to the realities of modern administration.
One of the novelties is the possibility for third parties – who are not parties to the proceedings but are called upon to provide explanations or documents – to act through a general attorney-in-fact.
The regulation is intended to allow general attorneys-in-fact (including professional attorneys) to act on behalf of entities that participate in proceedings but are not parties to them. The purpose of this change is to reduce the need for direct involvement of these entities in contacts with the tax authorities and to facilitate their participation in proceedings, especially for those from outside Poland.
Another important change is the adaptation of the rules to the current Act on Electronic Service of Process. The regulation of this issue is particularly important in the era of widespread digitalisation of contacts with the authorities.
The amendment also provides for a simplification of the procedures relating to powers of attorney – it will be possible for non-professional agents to notify their amendment, revocation or termination. This is a concession to taxpayers who use the services of trusted but non-professional advisors.
In addition, the extension of the possibility to serve hard copies of electronic letters – provided that they bear a qualified electronic seal – is another element in making the system more flexible and should enable the tax authorities to act more quickly and effectively.
Also noteworthy is the proposal for remote hearings of parties and witnesses, which will not only increase accessibility but is also in line with modern working standards in public administration.
Finally, the procedure for the ex officio correction of tax returns will also change. As part of their verification activities, tax authorities will be able to make corrections up to the amount of PLN 10,000 (the previous limit was PLN 5,000), which will significantly speed up the processing of minor inaccuracies and errors without the need to initiate full proceedings.
Clarification of regulations – changes that will affect the way tax is settled
The amendments also clarify a number of existing rules, making tax settlements simpler, more flexible and in line with the latest standards:
- Enabling the tax authorities to determine more precisely the amount of a refund or excess input tax– the tax authority will be able to determine this amount taking into account the excess that can be deducted in subsequent taxable periods
- Clarifying the order in which instalment payments and payments of tax arrears are to be set off against individual liabilities
- Increasing the amount up to which an entity other than a taxable person may pay tax – this will make it easier for entrepreneurs, especially large companies, to manage tax liabilities within groups of companies
- The possibility of tax being remitted before its due date
- Simplification of the procedure for claiming overpayments, removing the need to make a claim if the overpayment is due to a correction to a tax return
- No need to round up interest on late payments
- Supplementation of the provisions on tax refunds and on interest rates and time limits for the refund of overpayments
- Possibility of submitting ZAW-NR notifications online and allowing attorneys-in-fact to sign these documents
- Possibility of correcting the tax return in the event of an overpayment and of submitting a refund application by shareholders/partners of a dissolved company/partnership
The rules for determining limitation periods and reporting MDR tax schemes will also change, which we will analyse in detail in the next issue of Tax Focus.
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