Tax clarifications – new instrument of protection for taxpayers
One of changes implemented as of 1 January 2017 to the General Tax Code is the establishment in the tax law of an institution of general explanations to tax legal regulations – the so called tax clarifications (objaśnienia podatkowe) (Article 14a.1.2 of the Code), wherein the authority empowered to issue the same, i.e. the Minister of Finance, is to explain the application of legal regulations with regard taken, similarly as in the case of general binding rulings, the case law of courts of law, the Constitutional Tribunal or the Court of Justice of the European Union.
However, contrary to general binding rulings, the essence of which is to interpret the prevailing legal regulations, tax clarifications are to include practical guidance for taxpayers (examples). Otherwise than in the case of binding rulings, clarifications are to be published in the Public Information Bulletin on the website of the office providing services to the Minister of Finance under the heading “Tax clarifications”, together with the date of their publication.
Pursuant to amended legal regulations, a taxpayer who acts, in a settlement period concerned, in accordance with tax clarifications is awarded the protection envisaged in Articles 14k to 14m of the Code, meaning that in principle such conduct cannot bring any detriment to the taxpayer (Article 14k of the Code), and if the clarifications are subsequently changed, the taxpayer is released from the obligation to pay tax to the extent arising from the clarified event (Article 14m of the Code). At the same time, according to Article 14l of the Code, if tax effects connected with the event to which the clarified facts correspond took place before the clarifications were published, the acting in accordance with the clarifications does not release the taxpayer from the obligation to pay tax. The legislator also included in the law provisions excluding the protective function of clarifications – if the clarified facts or future event make an element of the activities covered by a decision which is issued with application of a tax anti-avoidance rule or in connection with abuse in VAT, the provisions of Articles 14k to 14m will not be applicable.
On 17 March this year the first tax clarifications were published on the website of the Ministry of Finance – regarding the application of a reverse charge mechanism in transactions involving the provision of construction services. As expected, the interpretation of the prevailing legal regulations in the published document has been supported with numerous examples, including also example figures, which in our opinion clear many doubts connected with the application of the reverse charge to selected construction services. You are invited to read the clarifications (in Polish) at the following address:
It is also worth noting that tax clarifications are not the only new institution aimed at facilitating the proper application of tax legal regulations for taxpayers. As of January they may also refer to the so called established interpretation practice (utrwalona praktyka interpretacyjna), understood as the explanation of the scope and manner of applying tax legal regulations, dominating in individual binding rulings which are issued with respect to the same facts or future events and in the same legal regime, in the period of the most recent 12 months. It is another step of the legislator aimed at minimising the number of individual binding rulings which are issued.