Polish Lawmakers Approve Measure to Favor Taxpayer in Case of Ambiguity

The Sejm, the lower chamber of the Polish parliament, on July 12 passed a number of amendments to the 1997 Tax Code, including a controversial change, in new article 2a, establishing a general rule that “non-resolvable doubts regarding tax law shall be decided… to the benefit of the taxpayer.”

Taxpayers, tax advisers, and a number of politicians have pushed for a general rule of this kind for a long time. In particular, outgoing President Bronislaw Komorowski recently ordered a September 6 nationwide referendum on three issues, including the rule favoring taxpayers in cases of ambiguity. Now that the Sejm has passed the new provision, that question in the upcoming referendum appears to be settled.

Several observers, however, are criticizing the wording of the new provision, arguing that tax authorities, for all intents and purposes, “never have any doubts.” Critics say the new provision should instead refer to cases in which more than one interpretation of the tax provisions is possible, stipulating that the interpretation more favorable to the taxpayer should prevail.

In addition to the controversial new general rule, the newly adopted amendments include a few minor, technical changes to the 1991 Personal Income Tax Law and the 1992 Corporate Income Tax Law regarding the method taxpayers are to use when applying corrections to their tax-deductible expenses, and a minor amendment to the 2004 Freedom of Business Activity Law regarding the procedures for performing a tax audit.

To become binding law, the newly adopted amendments still must be approved by the Senate and signed by the president.