On 4 August 2025, the Ministry of Finance presented a draft amendment to the General Tax Code which could be one of the most significant reforms in recent years. The most crucial aspect of the proposed changes is the elimination of the mechanism that suspends the statute of limitations for tax liabilities when criminal tax proceedings have been initiated. Due to its abuse by tax authorities, the institution of such proceedings has been a source of enormous controversy for years and the subject of numerous disputes before administrative courts and the Constitutional Tribunal. We are therefore taking a look at whether the instrumental use of this measure will finally be consigned to oblivion.
Elimination of the common suspension of the statute of limitation period
Pursuant to Article 70 §6 of the General Tax Code, the limitation period for a tax liability does not commence or, if it has already commenced, is suspended, on the date proceedings are initiated in a case concerning a tax offence or tax petty offence, provided that the suspected act relates to a failure to fulfil that liability.
In practice, merely initiating criminal tax proceedings is enough for the tax authorities to suspend the statute of limitation period. This gives them the opportunity to significantly extend the time for pursuing arrears. Specialists, practitioners and taxpayers themselves criticise this mechanism for being open to abuse and contrary to the principles of legal certainty and speed in tax proceedings.
The proposed amendments provide for the repeal of Article 70 §6(1) of the General Tax Code, thus eliminating the legal basis for such suspension.
An analysis of appeal decisions by the National Revenue Administration illustrates the scale of the issue. In 2022, decisions to suspend the limitation period were issued in almost 19% of cases, rising to nearly 37% in the first half of 2024.
The abuse of this measure has become so significant that, in its resolution of seven judges of 24 May 2021 (Case No. I FPS 1/21), the Supreme Administrative Court considered it justified to examine, within the framework of administrative court audit, whether the initiation of such proceedings was instrumental.
In other words, the court should assess whether the authority’s action was solely motivated by the desire to suspend the limitation period, with no real intention of conducting criminal tax proceedings.
Furthermore, in its decision of 14 April 2025 (Case No. I FSK 1078/24), the Supreme Administrative Court explicitly informed the Minister of Finance of significant violations in the application of Article 70 § 6(1) of the General Tax Code. The Court pointed out that the tax authorities are initiating criminal tax proceedings for the sole purpose of suspending the limitation period and thus preventing it from expiring. According to the Supreme Administrative Court, this violates the constitutional principles derived from Article 65(1) and (3) in conjunction with Article 32(1) and Article 2 of the Polish Constitution, particularly the principle of citizens’ trust in the state and its legislation, and the principles of equality and the rule of law.
Is there wiggle room for the tax authorities?
At first glance, it would seem that the amendment exclusively benefits taxpayers by removing a measure that has often been considered oppressive. However, the Ministry of Finance has devised an alternative way to protect the interests of the tax authorities.
According to the proposed changes, it will be possible to pursue the payment of the equivalent of unpaid public liability in criminal tax proceedings, even if the tax liability itself has expired (proposed Article 15 §1a of the Criminal Tax Code).
It should be emphasised that this will not be the standard pursuit of a time-barred tax liability through enforcement proceedings. Instead, a criminal court will rule on the obligation to pay an equivalent amount as part of its judgement.
This raises significant systemic and constitutional doubts, since criminal courts are not competent to rule on tax liabilities sensu stricto — let alone replace them with an ‘equivalent’ determined for the purposes of a criminal tax decision. This could result in the taxpayer being obliged to pay the liability despite it having expired, in disregard of the procedures and guarantees applicable to tax and enforcement proceedings.
Furthermore, Article 44 §2 of the Criminal Tax Code, which provides that acts involving the loss or threatened loss of public law liabilities cease to be punishable if the tax has expired, is to be repealed. Following the amendment, it will be possible to initiate criminal tax proceedings even if the liability has expired, and the perpetrator will still potentially face punishment and be required to pay the equivalent of the tax.
Consequences for taxpayers
Undoubtedly, the amendment restricts the current practice of initiating criminal tax proceedings for instrumental purposes, a change that is viewed positively by the legal community as it strengthens the principles of certainty and stability in tax law.
However, it also gives tax authorities increased scope for action. Even if the limitation period for tax liabilities expires, the taxpayer’s liability will not be definitively terminated – the risk of criminal tax liability will remain, and the tax authority will still be able to pursue payment of an amount equivalent to the tax.
Summary
The announced changes to the General Tax Code can be seen as an attempt to apparently balance the interests of tax authorities and taxpayers. While they eliminate a widely criticised practice, they also introduce new measures that allow law enforcement authorities to claim the equivalent of amounts due, even if the tax liability itself has already expired.
In practice, this represents a shift in emphasis: taxpayers will no longer be able to consider the end of the statute of limitations as a definitive ‘cut-off’ for tax risk, while the tax administration will gain the ability to operate in a new, ambiguous area – applying criminal procedure.
Although the possibility of suspending the limitation period due to the initiation of criminal tax proceedings will formally disappear, the actual effects of the new regulations may be much more severe.
In particular, doubts arise regarding situations in which a criminal court rules on the obligation to pay the ‘equivalent’ of an unpaid public law liability that has already expired. In practice, this solution could undermine the constitutional function of the statute of limitations, potentially allowing it to be circumvented under the guise of criminal liability.
So, will the amendment actually put an end to the practice of initiating criminal tax proceedings for instrumental purposes? Formally, yes. In practice, only time will tell how the tax authorities and criminal courts will use the new measures and to what extent they will comply with the principles of proportionality and citizens’ trust in the state.
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