Public Governance, Administration and Finances Law Review


�e Assumptions of a New Tax Ordinance in Poland

Leonard Etel*, Mariusz Popławski**

* Prof. zw. dr hab. Leonard Etel is the Rector of University of Białystok, Head of Department of
Tax Law, Law Faculty, University of Białystok; President of General Taxation Law Codi�cation
Committee. (e-mail: leonard.etel@wp.pl)

** Dr hab. Mariusz Popławski is associate professor of the Department of Tax Law, Law Faculty,
University of Białystok, Poland; Researcher at the Center of Czech and International Tax Law at
Masaryk University, Faculty of Law, Brno, Czech Republic; Member of General Taxation Law
Codi�cation Committee. (e-mail: mpoplawski@poczta.onet.pl)

Abstract: In 2014, the General Tax Law Codi�cation Committee (GTLCC), responsible for drafting a
new Tax Ordinance, was established in Poland. �is paper intends to present, in two parts, the
expectations of this new Tax Ordinance, which has been prepared by the GTLCC. �e �rst details how
the protection of taxpayers’ rights will be ful�lled, and the second focuses on the legal constructs used to
increase the e�ciency and e�cacy of the Tax Ordinance.

Keywords: tax; tax law; Tax Ordinance; general tax law; codi�cation of tax law; Polish tax law

1. Introduction
�e current Tax Ordinance, introduced in 1998, has been amended several
dozen times, and yet despite this, fails to meet today’s needs and standards.
�is was the main driving factor in establishing the General Tax Law
Codi�cation Committee (GTLCC),1 which was formed by the Council of
Ministers at the end of 2014. �e aim of the Committee was to prepare for the
development of a new Tax Ordinance, and (within 2 years from the day of
adopting the assumption by Council of Ministers) to draft a bill for a new
general tax act in conjunction with acts regarding its implementation.
�e aim of this paper2 is to present the most important elements of the

revised Tax Ordinance objectives3, and will be preceded by a short description
of the current Tax Ordinance. Additionally, several reasons will be presented
explaining the necessity of this new Tax Ordinance in being introduced;
primarily that these regulations will ful�ll two fundamental objectives. �e �rst
is to protect taxpayers’ rights. �is will be accomplished primarily through the
mitigation of excessive rigor of the Tax Ordinance with regard to taxpayers. It
is strongly recommended that legal mechanisms protecting taxpayers’ positions
in their contact with tax administration should be introduced in the new act.
Regulations contained therein should be based on the presumption that a
taxpayer is a reliable person who does not consciously commit tax law
violations. �e second main purpose of the new Tax Ordinance is an increase

10.53116/pgaflr.2016.1.2

https://doi.org/10.53116/pgaflr.2016.1.2


in the e�ciency and e�cacy of the tax obligation’s ful�llment. Tax laws,
including Tax Ordinances, should serve for the collection of tax. Greater
e�ciency of tax authorities, however, cannot involve the infringement of
taxpayers’ rights.

2. Outlook of the Tax Ordinance of

1997
�e currently binding Tax Ordinance came into e�ect on January 1st 1998.
�is act covers institutions of tax law which are common for all taxes that are
in force in Poland. Regulations included in this Tax Ordinance can be divided
into several groups. �e �rst is composed of de�ning catch-all provisions.
Certain concepts used by the legislator in tax statutes are not concurrently
explained therein. However, they have been de�ned in the Tax Ordinance and
may be used, to such an extent, as additional support. �e second includes
substantive law institutions that certain obligations from, burdening taxpayers
most of all. Such an obligation, for example, is the need to pay default interest.
�is obligation supplements a primary duty, which is tax payment in due time.
Within this framework, regulations imposing obligations on other subjects of
tax law – third parties, legal successors, heirs, tax remitters, and tax collectors
should also be indicated. �e third part includes institutions granting speci�ed
rights connected with the execution of liabilities they are burdened with. �ey
concern both a taxpayer’s inter alia, the right to recover excess payment or the
right to obtain postponement of maturity, but also a tax authority (security of
tax obligations execution). �e fourth part is procedural regulations–that is
actions which are undertaken inter alia, from the moment tax proceedings are
initiated, to the issue and service of tax decisions.

3. �e reasons to introduce a new Tax Ordinance

�ere are approximately seven reasons why the currently binding Tax
Ordinance should be replaced rather than amended. To begin with, there is
need to create in the ordinance such mechanisms that would assure a balance
between both the public and taxpayers’ interests. Justi�able claims to increase
the protection of a taxpayer’s position in relation to tax service are commonly
postulated. Such a delicate matter as tax must be solved not only with due



respect paid to taxpayers’ rights but also the State’s interest, i.e., the
organization �nanced by all taxpayers, a fact which is frequently forgotten. �e
currently binding Tax Ordinance lacks institutional characteristics of a mature
codi�cation of tax law’s general part. �e leading one among them is the need
to write down the principles of general tax law. �eir catalogue will contribute
to a better understanding and application of tax provisions contained not only
in the Tax Ordinance.

Secondly, there is an urgent need to establish taxpayers’ rights and duties in
the form of a catalogue, included in one legal act of statutory power. �is will
improve the relations between taxpayers and tax authorities, which are
negatively perceived by society. �e new Tax Ordinance must embrace an
enormous amount of the existing case-law of administrative courts on tax
matters. Its impact, therefore, on the application of law is substantial.
However, not all potential doubts could be successfully dispelled this way,
which is why a new law is necessary.
�irdly, due to numerous amendments, meaning and understanding of

some solutions has changed over time, which can hamper the application of
this Act. It is now no longer su�cient to understand a legal text and rules of
legal interpretation, complemented by the knowledge of judicial judgments, to
interpret Tax Ordinance. It is absolutely necessary to know the history of the
multiple changes thereto, and to be knowledgeable of what unexpected
outcomes they have sometimes resulted in.

Additionally, currently binding Tax Ordinance lacks institutions existing in
most modern acts of this type. An example is of the clause against tax evasion,
or regulations on soft forms of tax disputes’ settlements not only within tax
proceedings (mediations and agreements).

Moreover, there is a need for greater and more frequent use of electronic
communication to contact taxpayers. �is issue should be comprehensively
and systematically regulated, which is not possible in the course of continuous
amendments of the existing provisions.

Furthermore, due to Poland’s accession to the EU, development of
technology – as well as phenomena and processes that are subject to tax law –
resulted in the objective expiry of solutions adopted in the Tax Ordinance
several years ago. �e legislator attempted to prevent this by implementing
successive amendments thereto, sometimes quite extensively, but such a
continually amended ordinance has lost its original structure, which itself has



not been free of defects. It has become clear now that the possibilities of
improving and updating the Tax Ordinance in the course of further
amendments has been exhausted.

Finally, it is necessary to harmonize the provisions of a new Tax Ordinance
with other tax law provisions and regulations beyond this area. It is
indispensable to clearly and precisely establish the relation of the Ordinance to
the provisions on, among others, �scal inspection, regulations on
administrative execution, the Code of Administrative Procedure, or the Act on
Freedom of Economic Activity.

 

4. �e protection of taxpayers’ rights

4.1 The principles of tax law
Since there is non-equivalence between tax debtors and creditors, there is a
need to establish in the new Tax Ordinance provisions assuring the protection
of taxpayers’ rights, as they are a weaker party to the tax law relation than a tax
authority. In proposing the introduction of a catalogue of tax law principles to
the new Tax Ordinance, it should be restricted to norms determining the
application of legal regulations within the scope of tax law. Regulations on tax
lawmaking are, and should be left, beyond the scope of tax law principles
codi�ed in the provisions of general tax law. �e reason being is that the issues
of lawmaking are regulated in the Constitution of 1997, so there is no need to
repeat the norms thereof in the new Tax Ordinance. Additionally, the matter
of general tax law justi�es such a scope of tax law principles. If the Tax
Ordinance does not regulate the process of lawmaking, there are no grounds to
include fundamental lawmaking principles within it. Tax law principles should
therefore exclusively embrace the rules of applicable tax law; fundamental
norms determining the relationship between a tax authority and an entity
subject to taxation.
�e justi�cation for creation of a catalogue for this branch of legal

principles, that would be uniform and common for both substantive and
procedural tax law, also justify the codi�cation of taxpayers’ rights and duties.



4.2 Taxpayers’ rights and duties

In order to improve potentially faulty, or even oppressive, operations of tax
authorities, it is necessary to articulate to taxpayers their rights, to hopefully
eliminate any knowledge disparities. Such citizen legal protections are
reasonable due to the existence of a catalogue of recognized values, and when
one considers contemporary standards of the relationship between citizens and
their State authorities, which are based on ancillary roles of the State
administration towards society. �e State should use the powers it is entitled to
in a manner assuring not only the ful�llment of its set objectives, but also
respecting the interests of entities incurring the burden of its functioning
(taxpayers).

4.3 New soft forms of tax authorities’ operation

�e new Tax Ordinance act will be provided with the following new forms of
tax authorities’ operation: taxpayer’s guide and support; consultation
procedures; agreements between taxpayers and tax authorities; tax mediation;
and a program of correct settlement based on cooperation. Tax authorities are
appointed to facilitate correct ful�llment of the duty to provide State authority
with taxes. In the new Tax Ordinance, a taxpayer will be entitled to acquire,
and be able to rely on, o�cial information from many sources– deriving
protective e�ects from the fact of applying it. Within general consultation
procedures, an applicant and tax authority shall make arrangements on the
past or future settlements of the taxpayer. �is procedure could be done at the
taxpayer’s request within the scope of the evaluation of tax consequences of
complicated transactions carrying a high tax risk for economic entities,
estimation of the taxable object’s value, and evaluation of the transaction
object’s character, etc. Within the procedure, factual arrangements shall be
made, and evidentiary proceedings will be carried out. A decision issued in the
procedure will be binding for both the tax authority and taxpayer, and will
furthermore be subject to suability. �e use of the consultation procedure will,
in principle, be payable.

Agreements between tax authorities and taxpayers will be concluded in case
of doubts as to the matter’s factual state. �is may be di�cult to eliminate, on
determination of the value of a taxable object, or transaction, on validity of the



application of reliefs in tax payment. �e agreements will be documented by
records containing, among others, the scope and content of the arrangements
made. A tax authority will be required to re�ect on the arrangements in tax
inspection records, or tax decision. �e subject of an agreement will not only
cover a case settlement, but will also detail any issues that arise during tax
proceedings, or tax inspection, that do not decide on the settlement (e.g. the
scope of evidentiary proceedings that should be carried out). �e amount of
the tax obligation cannot be directly subject to the agreements.

Tax mediation shall be the procedure used to solve disputes with the
participation of a third party – a mediator. It will be introduced as a procedural
mechanism facilitating communication between a tax authority and taxpayer.
�is procedure will constitute particular proceedings initiated upon the request
of one of the parties of a dispute (a taxpayer, or tax authority) upon agreement
of the other party. �is may occur at any stage during the course of the
proceedings. �e procedure will be constructed with respect for basic rules on
mediation, among others: voluntariness, impartiality, neutrality of a mediator,
and con�dentiality. �e parties thereto will select a mediator freely and jointly
from the list kept by the Minister of Finance. Mediation costs will be borne by
the State or municipality.
�e purpose of the program will be to assure the observance of tax law

through establishing close relations between tax authorities and taxpayers. �e
program will be addressed to strategic entities for the State budget. Its purpose
is re�ected in the slogan, ‘transparency in return for certainty’. ‘Transparency’,
because a taxpayer who is a participant of the program reveals any substantive
tax issues that are potentially disputable between him/her and an authority.
‘Certainty’, because a tax authority responds to questions asked by a taxpayer
without delay (after consulting a taxpayer him or herself and in the spirit of
agreement and understanding for business).
�e program of correct settlement based on cooperation shall be maximally

deformalized, and based on a personal obligation of decision-makers in a
business entity and tax authority. Participation in the program will be not
obligatory. Conditions of the participation therein shall be well-functioning
internal procedures of settlements in an entrepreneur’s business (‘tax
governance’), veri�ed by an audit before concluding an agreement with the
taxpayer.



4.4 Advance tax rulings
Tax law is a complex �eld of law. �is is, among other things, due to: the
existence of di�erent taxes and forms of taxation; their frequent changes; and
binding EU and international law regulations, which all contribute to
increasing complexity of law and uncertainty regarding its content and, in
consequence, its interpretation and application. It is a source of potential
con�ict between the interests of taxpayers, and the tax administration which
represents the State’s �scal interests. �at is why, advance tax rulings (ATRs) of
general and individual character, should be treated as a signi�cant extension of
the scope of protection of taxpayers’ economic rights and freedoms.
Additionally, ATRs are an important and stabilizing element of solving
disputes between a taxpayer and tax authority. ATRs are one of the most vital
guarantees protecting taxpayers’ subjective rights. Undeniably, on the basis of
these rulings, a taxpayer acquires knowledge within the scope of rules which,
together with tax law provisions, co-create a potential legal situation of each
addressee of tax law. �ese entities develop their sense of legal certainty and
security not only on the basis of tax acts, but also on the basis of application of
tax law by tax administration.

Within the scope of the ful�llment of fundamental objectives of the new
Tax Ordinance, and the enhancement of guarantees resulting from binding
rulings of tax law provisions, two aims should be achieved. First, we should
strengthen the importance of general ATRs. �us, there would be primacy of
general rulings over individual ones. Individual rulings would be issued when
general ones do not function in a given factual state; a possibility of quoting
general rulings in an equivalent factual state. At present, a considerable
number of individual rulings in�uences a lack of transparency in
understanding tax law, and causes doubts in its application. �e adopted
solution will be to assure the elimination of divergent interpretations referring
to the same factual state, and the need for multiple applications for the issue of
individual rulings in the same factual state. �e adopted solutions regarding
solely general interpretations should introduce a possibility of asking legal
questions by an authority authorized to issue such rulings to the Supreme
Administrative Court.

Second, there should be a centralization of the process of issuing ATRs. �e
introduction of uniform principles within this scope, with regard to the



entirety of tax law provisions’ rulings, regardless if a particular taxpayer
constitutes income of the State budget, or local self-government units. It
results from the need to undertake actions leading to the extension of the scope
of services provided for the bene�t of taxpayers and quality improvement. A
modern, e�cient, and national point of uniform tax information for taxpayers
and tax administration employees should be created within this scope. �is will
guarantee uniform procedures and standards within the scope of issuing
individual ATRs.

4.5 Discretionary reliefs
�e new Tax Ordinance will prefer forms of support not resulting in failure to
pay tax but allowing late, yet still e�ective, ful�llment of a tax obligation. �e
catalogue of applied discretionary reliefs shall be extended by the introduction
of the possibility of a tax remission, or its part, in order to avoid the occurrence
of tax arrears for a taxpayer, and is a condition of applying the relief. On the
other hand, reliefs will be applied according to the principle of balance
between public and taxpayers’ interests using soft forms of arranging matters.
In the case of tax-constituting municipal revenue, the application of reliefs to
pay tax should be decided solely by municipal tax authorities.

4.6 Representation
�is Tax Ordinance will also contain comprehensive regulation of powers of
attorney, and proposes three distinguished categories: general, limited, and for
‘service of process.’ �e general power of attorney will apply to all participants
of tax procedures. �e appointment of a general agent will eliminate any
potential nuisance connected with the obligation to submit a power of
attorney, or o�cially certi�ed transcript of a power of attorney to be attached
to the �les of each tax case. �is will not only limit bureaucracy in tax
authorities, but also simplify representation of the party by an agent. General
powers of attorney will be gathered in the electronic database, entitled Central
Register of General Powers of Attorney, and will be instantly available for all
State and self-government tax authorities, as well as tax inspection bodies.
Limited agents will be authorized to act in the indicated tax case, or other
indicated case within the jurisdiction of a tax authority, after submitting a
power of attorney to the �les of the speci�c case. �e new Tax Ordinance will
maintain the institution of an agent for service of process. �e appointment of
such an agent in Poland will be compulsory when a general, or limited



attorney, has not been appointed, and communication with a participant of tax
procedure may be hampered due to a change of place of residence (stay), or
lack of place of residence (stay) in Poland, or another EU Member State.
�e new Tax Ordinance will introduce the institution of a temporary

limited agent instead of a representative of an absent person. �e prerequisite
to appoint this type of agent shall only be for urgent cases, and a temporary
agent will be appointed by a tax authority for an absent natural person.
Whereas for a legal person, or organizational unit without legal personality, a
temporary agent shall be appointed if their bodies are not present, or if it is not
possible to establish the address of their o�cial seat, the place of running a
business activity, or the place of residence of persons authorized to represent
their matters. Such a temporary agent would be empowered until a court
appoints a guardian.

4.7 Limitation of tax obligations
During works on limitation, it is particularly important to distinguish the
limitation of the right to tax assessment, and the right to collect tax. In the
proposed model, a tax authority has time, determined by the provisions of law,
to assess tax understood as submitting a decision determining, or establishing
in nature by a �rst instance tax authority. �us, it would be the period of time
to question the correctness of tax settlements made by a taxpayer (e.g. in a
submitted tax declaration), or issue a determining decision if a declaration is
missing. Moreover, this time limit would bind a tax authority within the scope
of issuing a decision determining the amount of tax obligation if the Act
envisions such a manner of tax chargeability. During such a period of time, it
should be possible to issue decisions aiming at recovery of dues the State is
entitled to that have been wrongly remitted, or credited towards a taxpayer and
which are subject to Tax Ordinance including, among others, the use of loss,
or tax to be carried over, etc. In the case of a decision determining tax loss, one
should support the solution according to which this decision could be issued
during the period of limitation of the assessment of tax obligation during
which a taxpayer settles the loss.
�e second type of limitation, limitation of the right to tax collection,

would be applied when tax obligation exists and its amount is known (it
results, in principle, from a correctly submitted tax declaration, or declaration’s



correction, or served decision). �is limitation would apply after the period
lapse of the limitation of tax assessment.

As far as the limitation of assessment is concerned, two periods of
limitations should be introduced: three or �ve years, counted from the lapse of
the term of payment, or tax obligation occurrence. A three-year-long period of
the limitation of assessment would be applied with regard to tax settlements
not connected to a business activity. A �ve-year-long period would refer to
those tax settlements connected with a business activity. �us, a three-year-
long period of the limitation of assessment will cover taxpayers whose
settlements, in principle, are of uncomplicated matters. �is mechanism will
concern, among others, most taxpayers subject to a natural person’s income
tax. And after the three-year lapse (not after �ve years as it is now), a large
group of taxpayers will be exempt from the duty to keep records of documents
regarding tax obligations. �is shall be the case of the new Tax Ordinance
except in certain situations where the limitation of assessment will occur after a
�ve-year lapse. Speci�cally, the following cases should be covered by the �ve-
year-long period of the limitation of assessment:

– Tax connected with running a business activity, i.e. tax that requires
keeping tax records pursuant to separate provisions (the current Tax Ordinance
de�nes tax records as accounts, revenue and expense ledgers, and registers and
records taxpayers, remitters, or collectors are obliged to keep pursuant to
separate provisions).

– Income tax owed for the so-called revenue from undisclosed sources.
– Income tax owed for the sale of real estate.
�e introduction of a �ve-year-long period of the limitation of assessment in

the above mentioned cases is supported by a more complicated nature of these
settlements, which entails the need of using a wider catalogue of evidence
during proceedings, or a greater number of tax law institutions (e.g.
estimation).
�e introduction of a �ve-year-long period of the limitation of tax collection

should be postulated, because the introduction of a shorter period does not
seem justi�ed. If the obligation results from a submitted and correct tax
declaration, or a �nal decision (possibly veri�ed by a binding court ruling),
pursuant to the principle of tax fairness, it should be executed. �erefore, it
should go without saying that if someone is obliged to pay the tax whose
existence and amount are, in principle, correctly established, s/he should pay



it. For this reason, the enforcement of tax owed is justi�ed over a longer time
period.
�e institution of a tax limitation should be feasible in nature. Under this

limitation of assessment, the possibility of an exclusion of the limitation should
be regulated, whereas its suspension should occur solely for objective reasons.
�is would be independent of a tax authority in events such as: taxpayer’s
death; the need to obtain information necessary for taxation from another
state; applying to a common court with a motion to establish the existence of a
legal relation or right; suspension of proceedings due to the settlement of a
representative case; as well as submission of a complaint to an administrative
court. �e application of prerequisites for the suspension of limitation of
assessment should not prolong the period of limitation of assessment by more
than �ve years in total.

Under the limitation of collection, prerequisites of the suspension or
interruption of its activities should be restricted as well. Under the limitation
of collection, the preservation of the following prerequisites of the suspension,
or interruption of the activities of limitation should be postulated: division
into installments; deferment of the deadline to submit a declaration, or
payment; prolongation of the term of payment; voluntary or executive pledge;
announcement of insolvency; or application of enforcement measures. �e
new ordinance should prepare and introduce solutions which would allow a
maximum period for the prolongation of the period of limitation of collection,
due to the suspension or interruption of the course of activities of the
limitation of collection.

4.8 Excess payment
It is necessary to introduce legislative solutions within the scope of cases for
when tax is paid unduly by a taxpayer who did not bear the economic burden
thereof. �e construction of some tax, particularly indirect, allows to transfer
such burden upon a consumer of goods or services. Legal solutions and
mechanisms within the scope of excess payment should not lead to unjust
requirements of a taxpayer. �erefore, the introduction of the mechanism
allowing the acquirement of excess payment by taxpayers subject to indirect tax
should be postulated, provided they bear the economic burden of the tax.

Changes within the scope of legal regulations on tax excess and return
should also contain the following:



– We should aim at the introduction of similar procedures for tax excess and
return. However in the latter case, they will be applied if special provisions
regulating the construction of the individual kind of return do not stipulate
otherwise.

– It is reasonable to simplify the procedure of claiming tax excess and return,
on proceedings to con�rm overpayment initiated ex o�cio, or if a request
should be introduced. A tax authority should, ex o�cio, in a simpli�ed
procedure (if possible), among others without the need to initiate proceedings,
con�rm overpayment each time it acknowledges its existence.

– �e catalogue of cases where overpayment shall be returned without
issuing a decision should be extended in instances, among others, when:
overpayment results from a declaration, or the correction of a declaration is not
questioned by an authority; when excess payment is a results of the motion of a
taxpayer to con�rm overpayment that is fully accepted by an authority; or
when excess payment is con�rmed ex o�cio. In the above-mentioned cases, a
decision should be issued, but only when it is requested by the party. If an
authority con�rms excess payment without a decision, it also should not be
obliged to issue decisions on overpayment (e.g. in the matter of crediting
overpayment towards tax arrears), unless the party applies for it.
Discontinuance of the issuing decisions mentioned above should be
accompanied by the rule according to which a tax authority should inform the
party about the settlement (e.g. crediting overpayment towards tax arrears), by
means of electronic communication, or by a telephone. Simultaneously, the
information regarding con�rmed overpayment may also be delivered in this
form. A vital supplement of the above-mentioned mechanism should be the
solution according to which the settlement on interest (i.e. con�rmation of its
existence, or lack thereof ), will be an element of the decision on overpayment.
However, the subject of this settlement should not be the calculation of the
amount of due interest, and it will not be necessary to initiate separate
proceedings in the matter of interest. If an authority does not issue a decision
to con�rm overpayment, and a taxpayer is entitled to interest, an authority
transfers interest without issuing a decision thereon. Nevertheless, each time a
taxpayer should have the possibility of applying for granted interest which
should be settled in the form of a decision, unless it is fully accepted.

– Determination of the relation between proceedings to con�rm
overpayment and proceedings establishing the amount of tax obligation (e.g.



with a statutory exclusion of the obligation to conduct recovery proceedings
before the examination of a request to con�rm overpayment).

– Extension of cases where overpayment is returned together with interest.
Excess payment should be returned together with interest calculated from the
payment date when it results from defective lawmaking (con�rmed by the
judgment of the Constitutional Tribunal, or the Court of Justice of the
European Union), or the application of law. Additionally, from the lapse of the
term of overpayment, if it was not returned within this time, and a taxpayer
did not contribute to the delay. A taxpayer should not incur negative
consequences connected with defective operation of the State authority, both
within law making and the application of law. An important supplement of the
above-mentioned mechanisms should be the solution according to which the
settlement on interest (i.e. con�rmation of its existence, or lack thereof ) will be
an element of the decision on overpayment.

– Extension of the group of entities entitled to obtain excess payment by all
entities covered by the tax law relation, among others remitters, collectors, legal
successors, or third parties, including such problems as, for example, the loss of
tax capital group status, the loss of law existence, legal capacity or capacity for
legal actions, and/or insolvency.

– A possibility to introduce the return of overpayment to entities indicated
by a taxpayer.

4.9 Electronic communication
Contact with a taxpayer through modern communication technologies should
be further emphasized. �anks to this, proceedings’ dynamics will increase,
while their costs will diminish. It is not economical to instigate tax proceedings
when the cost of their pursuit, including tax authorities’ expenditures and costs
of letter services, exceeds the in�icted amount of obligation. �e new Tax
Ordinance should enshrine the concept of a simpli�ed legal environment, and
the creation of facilities for taxpayers–including entrepreneurs. Indicated legal
mechanisms and instruments are necessary for the development of e-
administration. �ey con�rm changes occurring in the approach of
administration towards an individual. �ey also demonstrate a support-
oriented attitude to individuals, and the need to provide them with more
e�cient, and e�ective, contacts with administration. Development of new IT
and communication technologies, including electronic communication, exerts



a positive impact on digital society’s development. �is is particularly
important within the rapid paced and progress-oriented context of the
surrounding world.

4.10 Complaints
�e new Tax Ordinance will contain provisions on complaints. Under the
current legal status, the Code of Administrative Procedure applies thereto,
however preservation of this status is unsubstantiated. It disrupts regulative
uniformity of tax procedures, and limits taxpayers – who are potentially
interested in submitting a complaint or request – from getting acquainted with
the provisions specifying a relevant course, or even being aware of their
existence. �ese provisions were previously located in another Act, but failure
to adjust some of them to the speci�city of tax cases can result in their
identi�cation and corrective potential to be unused.

5. Increased e�ciency and e�cacy of tax obligation’s assessment 
and collection

5.1 Increased efficiency of tax

proceedings
�e right of a party to challenge a decision should be made feasible. �e time
limit to submit an appeal or complaint should be prolonged (up to thirty and
fourteen days respectively). �is will allow better preparation for a party to
formulate complaints against a decision or order and more precise preparation
of motions for evidence. For the same reasons, the time limit to apply for the
withdrawal of a �nal decision after the judgment of Constitutional Tribunal,
or Court of Justice of the European Union, should be prolonged from one to
three months.

One of the general principles of tax proceedings is of expeditious
proceedings. Inactivity of a tax authority, or protracted pursuit of proceedings,
threatens citizen’s con�dence in State bodies. �erefore, it is reasonable to
strengthen the position of a party to the proceedings through equipping it with
e�ective legal measures for action in the situation of inactive, or protracted
conduct, of a tax authority.



�e economics of tax and judicial administrative proceedings justi�es the
creation of a possibility of suspending proceedings in similar cases, or in closely
related ones. To begin with, a dispute in the ‘representative’ matter should be
settled, while other cases should be suspended. �is will allow a taxpayer to
rationalize procedural costs and eliminate a risk of massive enforcement of
decisions that may appear defective.

Tax authority should be authorized not to instigate and discontinue
proceedings initiated ex o�cio if the expected amount of the obligation does
not exceed a speci�ed numerical limit. �e new Tax Ordinance should follow
the direction of standardization of motions in tax cases. Provisions on
disciplinary penalties require fundamental changes. �e Codi�cation
Committee decided not to recommend for further works: renouncement from
an appeal for the sake of a direct complaint to a court, and presentation of the
case’s legal evaluation by an authority before issuing a decision.

5.2 Tax authorities
�e new act should be aimed at simpli�ed provisions concerning local
jurisdiction, and would be more expansive than current applications of the
same principle, which is binding in cases of all taxes collected by the
authorities subordinate to the Minister of Finance. Moreover, changes within
the scope of jurisdiction should embrace principles concerning the so-called
ossi�cation of jurisdiction which dictates that an authority involved at the
moment of launching an inspection shall remain involved in all relevant issues
connected with the subject of the case, both in tax and interlocutory
proceedings (e.g. concerning security).
�ere are almost 2500 self-government tax authorities in Poland. Due to

this, their expectations and needs cannot be ignored while creating a new Tax
Ordinance. �is is an issue of particular importance for tax authorities but also
from the point of view of taxpayers. Self-government taxes such as real estate,
agricultural, or forest taxes should be simpli�ed due to their common nature.
It is necessary to assume that all tax authorities should have similar powers as
far as general tax law provisions are concerned. Deviations from this principle
(including, most of all, speci�city of tax assessed and collected by the
corresponding category of tax authorities) will occur. Nevertheless, they must
be su�ciently justi�ed (the principle of adequacy). Moreover, the issue of
complementary regulation of the status of municipal tax authorities in the



provisions of general tax law and structural system provisions is valuable. �ere
is no legal act regulating structural, organizational, or functional matters of
local self-government tax administration, except self-government appeal
boards. In the long term, proposed actions are to improve self-government tax
authorities’ operations, increase their e�ciency, and facilitate correct
ful�llment of taxpayers’ obligations connected with the settlement of taxes and
fees constituting self-government revenue.

5.3 Tax inspection
It is proposed to establish a uniform and integrated procedure of tax inspection
in the new Tax Ordinance provisions for taxpayers who, in principle, ful�ll
their duties, and introduce a separate regulation for more rigorous inspection
procedures directed at �ghting common revenue o�ences. �e current
procedure of tax inspection is, on the one hand, sometimes too burdensome
for most taxpayers. Conversely, it can be too ine�ective with regard to tax
evaders. �erefore, it is important to diversify inspection procedures where the
criteria of applying individual procedures should refer to the seriousness of
irregularities, or the degree of harmfulness of committed revenue o�ences and
the need to secure evidence promptly.
�e procedure which refers to inspections aimed at �ghting tax fraud and

revenue o�ences should be contained in a legal act separate from the Tax
Ordinance (Law on Fiscal Inspection) and connect the elements of current
solutions of the Tax Ordinance, Law on Fiscal Inspection and Criminal
Procedure. �e legitimacy of the introduction of this procedure is con�rmed
by a recently observed increase in tax o�ences, particularly within the scope of
value-added tax scams. �ese o�ences are especially detrimental because they
result, on the one hand, in billions of PLN loss for the State Treasury
(threatening its �nancial security) and on the other, in immeasurable
consequences for the principles of competence, as well as the danger of
eliminating honest entrepreneurs from the market. It is purposeful to create a
catalogue of cases where this procedure would be applied. It should be used, in
particular, in the following cases: activities in organized crime, or organizations
aiming at committing revenue o�ences; money laundry; issuing documents on
activities that have not been performed, or intentional forgery of tax
documents.

5.4 The clause against tax evasion



�ere is a need to establish an anti-avoidance rule in new Tax Ordinance. �e
application of this clause will both deprive taxpayers of the tax bene�ts they
intend to obtain, or those bene�ts obtained due to undertaking arti�cial
arrangements which lacked economic justi�cation, but were done for the
purpose of obtaining tax bene�ts. Financial sanctions are not envisaged. �e
most vital form of the clause’s impact should be prevention. �e clause will
embrace all State and self-government taxes except the value-added tax. One of
the authorities entitled to apply this rule will be the Minister of Finance.
Taxpayers could request the issuance of a decision by their specially appointed
consulting body independent of tax administration.

5.5 Solidarity in tax law
Currently binding Tax Ordinance regulates the occurrence of joint/several
obligations to a limited extent, particularly when it is necessary to issue and
serve a decision thereto. Tax procedures conducted by tax authorities are not
su�ciently regulated in binding provisions within the context of solidarity but
also, for example, in the self-calculation of tax. Similar problems occur within
the scope of the institution of reliefs to pay tax obligations when only some
joint/several debtors apply for the relief.

Suitable changes connected with solidarity in tax law should be introduced
to individual institutions regulated in the new Tax Ordinance. Basic principles
of solidarity in tax laws, however, should be somehow factored out of general
provisions due to their universal character. �is solution is also supported by
the heterogeneous character of joint and several liability in tax law which can
be connected with the obligation of this nature, including those arising
through the service of a decision. Nevertheless, it may also be the liability for
another person’s debt, therefore it may be the institution connected both with
the stage when the tax law relation arises, and the assessment and performance
of tax obligations.

5.6 Default interest
Default interest is the consequence of an occurrence of tax arrears, and the
obligation to assess it exists regardless of the cause(s) of occurrence and
taxpayer’s fault within this scope. It should be required to pay interest without
the notice of tax authorities, whereas payments towards tax arrears and default
interest thereon should be proportionally credited. �e catalogue of cases of
non-application of default interest with regard to the binding legal status



should be extended by a new case. �is would then be connected with non-
application of interest during the period of judicial administrative proceedings
on checking legitimacy of a tax authority’s decision establishing, or
determining, tax obligation that is pending for more than twelve months.
Moreover, the prerequisite of non-application of default interest when a tax
authority did not verify the declaration containing mathematical errors, or
apparent mistakes under examinations thereof during two years should be
modi�ed. �e maintenance of a two-year-long period envisioned in the
currently binding provision, when tax authorities use electronic tools for a
declaration’s validation within the scope of arithmetic errors and apparent
mistakes, cannot be justi�ed. �is period should be shortened to one year. �e
instrument aimed at maximizing the level of voluntary ful�llment of tax
obligations in the new Act’s provisions should be the introduction of a lowered
default interest rate for taxpayers wishing to correct irregularities in the original
declaration and immediately settle tax arrears with the simultaneous indication
of time limits during which it will be possible.

6. Conclusion
For two primary reasons, the new Tax Ordinance has a chance to be a positive
change in the �eld of Polish general tax law. First, it will introduce new
institutions which currently do not exist in Polish legislation, such as the
introduction of tax law principles, and the catalogue of taxpayers’ rights and
duties to the new Tax Ordinance. By introducing these legal solutions, a
relationship will develop between tax debtors and creditors assuring necessary
protection to the weaker subject. �e complaint procedure, which will be
introduced in the new act, will become an important element in the system of
protection for taxpayers’ rights. �e course of submitting complaints will be
most suitable to report possible infringements of some rights (such as the right
to polite and professional treatment by civil servants). Among other things we
can outline new soft forms of tax authorities’ operations. �e advantages of
this are clear. �is will create the conditions to observe and apply tax law in a
way that is simultaneously e�cient, e�ective, and appropriate. �is will favor
cooperation between tax authorities and taxpayers and discourage disputes.
Another very essential elements of the new Tax Ordinance is the general anti-
avoidance rule. �is construct aims at setting a limit between tax planning and
tax avoidance, sometimes referred to as aggressive tax planning. Such a norm



will establish the limits of a taxpayer’s right to minimize his or her tax
obligations.

Second, it will improve some tax legal constructs, which were claimed to
operate improperly. Limitation stabilizes economic turnover through the
restriction, or exclusion, of a possibility of redress. In tax law, limitation
prevents either the assessment of tax obligation, or leads to its expiry. However,
in the currently binding act, a consequence of several exceptions to the general
rule is that its guaranteeing function is impaired. �e construction of new
provisions on excess payment should be accompanied by endeavors to simplify
the procedure leading to the transfer of excess payments to authorized entities,
as well as eliminate currently existing shortcomings in the application of this
institution. Tax procedure must be modernized so that it may satisfy
contemporary needs of taxpayers in a better way. Nowadays, in many �elds of
life and economy, procedures that are based on prompt and deformalized
contact are developing. Basic issues within the scope of electronic
communication should be contained in the general provisions of the new Tax
Ordinance. Moreover, further provisions thereof will include special
regulations connected with concrete institutions of tax law and reference to the
issue of using modern IT and communication technologies.

References

1. Formation of that entity are presented in Council of Ministers Regulation
of 29.10.2014 on the creation, organization and operation of General
Taxation Law Codi�cation Committee (Journal of Laws of 2014, item
1471).

2. �is article was based on the assumptions presented in: Leonard Etel (ed.),
Tax Ordinance - Directives on Constituting a New Regulation [Ordynacja
Podatkowa. Kierunkowe założenia nowej regulacji] (Białystok Temida 2,
2015).

3. �e assumptions of the new ordinance is published at:
http://145.237.239.199/documents/764034/12688111/20150317_Kierunk
owe_zalozenia_Ordynacji_Podatkowej.pdf (acessed 6 October 2015)

http://145.237.239.199/documents/764034/12688111/20150317_Kierunkowe_zalozenia_Ordynacji_Podatkowej.pdf