The Ministry of Finance rejected most of the comments submitted during consultations on the draft amendment to the Tax Ordinance (list no. UD196), including the most important ones regarding changes in the limitation period (we focus on them in the article). However, there remains a change that taxpayers have been demanding for a long time. After consultations, the draft still assumes the repeal of the provision (Article 70, paragraph 6, point 1), which currently allows tax authorities to initiate fiscal penal proceedings in order to suspend the limitation period. Business and organizations, however, pointed out that the introduction of a new ground for suspension of the limitation period may have the same effect (proposed Article 70, paragraph 6, point 7). It provides that the tax limitation period will be suspended in connection with the initiation of tax proceedings or their takeover by the Head of the National Tax Administration, in which an anti-avoidance clause may apply. In response to this allegation, the Ministry of Finance only supplemented the justification for the project. The provision in the draft remained unchanged.
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Why did the Ministry of Finance reject the proposal to change the suspension of the limitation period?
In the justification for the project, the Ministry indicated that initiating tax proceedings or taking over proceedings in a clause case (in which an anti-avoidance clause may apply) requires the tax authority to prove that a decision applying the clause may be issued in the case (Article 119a of the Tax Ordinance). Already at this stage, the tax authority – in an application to the Head of the National Tax Administration – will have to justify the possibility of applying the clause and indicate the tax benefit obtained by the taxpayer and the method of its calculation.
The resort also noted that The procedure is different in the case of penal-fiscal proceedings (they may run parallel to tax proceedings) and different in the case of proceedings applying the general clause against tax avoidance. The latter procedure is conducted by one centralized body, i.e. the Head of the National Tax Administration, and he also takes over the entire case. The authority conducting “ordinary” assessment proceedings therefore transfers the files to the Head of the National Tax Administration and can no longer take any action in the case.
What will be the changes in the tax limitation period?
The project, as we have indicated, removes a provision that has caused problems for years, i.e. Art. 70 pairs 6 point 1 of the Tax Ordinance, today used to instrumentally initiate criminal and fiscal proceedings in order to suspend the running of the limitation period.
However, the draft assumes (Article 23) that the above principle will continue to apply to tax liabilities arising before the date of entry into force of the amendment (before January 1, 2026). This also drew criticism from business and organizations.
Moreover, the draft still provides for the repeal of Art. 44 pairs 2 of the Fiscal Penal Code, which is related to the statute of limitations. Pursuant to this provision, the punishability of a fiscal offense expires when the tax liability expires. — After the change, the opposite will happen: the tax limitation period will no longer prevent fiscal penal liability – Tomasz Rolewicz, partner at EY, told us earlier. In his opinion, both of these changes demonstrate the broader intention of the Ministry of Finance: on the one hand, to formally limit abuses related to the instrumental initiation of fiscal penal proceedings, and on the other hand, to retain the possibility of pursuing receivables through the “back door”. — Once the tax statute of limitations has expired, the authorities will no longer be able to talk about paying the tax stricto sensuBut in fiscal penal proceedings it will be possible to impose an obligation to pay the “equivalent of the reduced public law receivable”. And here a fundamental problem arises: the amount of this “amount to be paid” will not be determined in tax proceedings, but in fiscal penal proceedings – said Tomasz Rolewicz.
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Business and organizations also drew attention to this problem during project consultations.
The Ministry of Finance replied that the repeal of Art. 44 pairs 2 kks is necessary. The consequence of leaving this provision would be to shorten the limitation period for certain types of prohibited acts with the highest criminal risk and characterized by high social harmfulness. The Ministry of Finance pointed out that the basic tax limitation period is five years, while the limitation period for high socially harmful crimes is 10 years. “[Uchylenie art. 44 par. 2 k.k.s.] “will enable the conduct and completion of preparatory proceedings and the conviction of perpetrators of serious fiscal crimes (especially in cases where extensive evidence has been collected in criminal proceedings, e.g. tax carousels),” explained the Ministry of Finance.
What changes will there be in the tax limitation period in connection with the establishment of a mortgage or tax lien
Let us add that the project also provides for: taxes secured by mortgage or tax lien will be subject to limitation. The entry of a compulsory mortgage or the establishment of a tax lien will result in the suspension of the tax limitation period. Today, registering a mortgage or establishing a pledge means that the tax never expires.
Author: Łukasz Zalewski, journalist of the Law section of Business Insider Polska
