As a part of the counteractions against the erosion of taxation and the shift of profits, OECD developed the so-called “BEPS” package, one of the elements of was a system for informing tax authorities about tax planning mechanisms – Mandatory Disclosures Rules.
This mechanism was reflected in the Council Directive (EU) 2018/8221 of May 25, 2018 (Journal of Laws UE L 139/1 Dz. U. UE L 139/1) amending Directive 2011/16 / EU on mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.
The provisions of this directive have passed into the Polish law: a new Chapter 11a of the Tax Ordinance, entitled Information on tax schemes.
Experts were skeptical regarding this partial transposition of the Directive into Polish legislation. The regulations raised numerous interpretation doubts, and many examples of the practical application of these provisions seemed absurd. Doubts were not alleviated by extensive tax explanations of more than 100 pages of January 31, 2019. Information on tax schemes.
No wonder, then, that taxpayers who wanted to avoid a fine and want to comply with applicable law, on the one hand, reported many events “just in case”, and on the other hand, many of them applied to the Director of the National Tax Information for an individual tax ruling regarding the need to submit information on the tax scheme for a specific event.
And here a significant problem arose, as the Director of the National Tax Information clearly stated that it was not entitled to issue an interpretation of tax law (individual interpretation) in a situation where the issue presented in the application for an interpretation does not concern the interpretation of the “material” law – and for such not considered provisions on tax schemes. The authorities explained that the essence of issuing an interpretation of tax law is the confirmation of the existence or non-existence of rights and obligations in the sphere of tax law on the part of the applicant.
In this respect, taxpayers challenged the tax rulings in question to the District Administrative Courts. Initially, however, they were skeptical about the matter and agreed with the Director of NTI. For example: Judgment of the District Administrative Court in Poznan of 5 December 2019, I SA / Po 825/19, Judgment of the District Administrative Court in Kraków of 29 January 2020, I SA / Kr 1312/19, Judgment of the District Administrative Court in Opole of 12 February 2020, I SA / Op 528/19, etc.
However, the jurisprudence gradually began to change in favor of taxpayers. From around April 2020, the Voivodship Administrative Courts more and more consistently adopted interpretations of the law that the norms resulting from the provisions specifying the obligations regarding reporting on tax schemes are substantive in nature. This change in the case law is confirmed by: Judgment of the District Administrative Court in Gorzów Wielkopolski of April 8, 2020, I SA / Go 61/20, Judgment of the District Administrative Court in Warsaw of April 29, 2020, III SA / Wa 2402/19, Judgment of the District Administrative Court in Warsaw with April 29, 2020, III SA / Wa 2458/19, Judgment of the District Administrative Court in Warsaw of April 30, 2020, III SA / Wa 2430/19.
Considering the above-mentioned lack of compliance of the District Administrative Courts, the position of the Supreme Administrative Court was to be of key importance. The first judgment in cases concerning the necessity to issue tax interpretations in the field of reporting tax schemes appeared on January 28, 2021, namely the judgment of the Supreme Administrative Court of January 28, 2021 (file reference number I FSK 1703/20). The Supreme Administrative Court took the position that the position of the Director of KIS and some Voivodship Administrative Courts was incorrect, that only such provisions of substantive law that directly relate to the tax liability could be the subject of an individual interpretation, as only then the applicant is covered by the protection resulting from the interpretation.
Other judgments of the Supreme Administrative Court on this topic are similar in their conclusions:
- of March 2, 2021 (file reference number II FSK 2386/20);
- of April 29, 2021 (file reference number II FSK 1873/20);
- of December 8, 2021 (file reference number III FSK 4548/21);
- of February 16, 2022 (file reference number III FSK 4150/21).
Argumentation in the above-mentioned The judgments are similar, in addition, the courts also indicate that it is impossible to accept the view that the provisions on MDR are procedural regulations. In tax law, procedural relations arise in connection with the initiation and conduct of relevant proceedings by the tax authority. They exist from the moment of its initiation, and their end is determined by the delivery of the final tax decision. The obligation to provide information on tax schemes arises before the initiation of tax proceedings, so it cannot be considered that it is of a procedural nature.
In addition, the authorities emphasize that the tax authorities should not limit the scope of the tax interpretations issued by implication, without the legislator’s explicit statement in this regard.
Further judgments of the Supreme Administrative Court in this case should be expected in the near future – the presented position should not change, as there is no judgment of the Supreme Administrative Court unfavorable for taxpayers at the moment. At the same time, the District Administrative Courts have already adopted a uniform line of jurisprudence in this regard, which is confirmed by the latest judgment of the District Administrative Court in Gdańsk of March 22, 2022 (file reference number I SA/Gd 37/22).
However, interestingly, there is still no individual interpretation regarding the need to report a tax scheme for a specific reconciliation. It is not known whether this is due to procedural obstacles or whether the interpretations are issued but unpublished.