Finacial Observer: What are the focus areas of work in the sphere of taxes in 2013?
Maciej Grabowski: We are finishing works on assumptions for the amendment of the Tax Ordinance Act. A comprehensive regulation on the issue of proxies is planned, including the introduction of the institution of general proxy, and not only for entrepreneurs – as is proposed in the deregulation package of the Ministry of Economy – but for all taxpayers. The rules for service of letters also need to be updated.
Moreover, a wider application of ICT in fiscal control is planned. Following taxpayers’ mobility, we are considering a more flexible attitude to tax settlements. More friendly procedures should be introduced, as well as the possibility to handle taxpayer’s matters by any tax office.
Is it true that the Ministry of Finance, in order to intensify the fight against tax evasion, is working on the introduction of, among others, the tax anti- circumvention clause (allowing for the creation of a catalogue of taxpayers’ actions aimed at avoiding tax payment – author’s note)?
Based on rich international experience in the field of combating tax evasion, it seems that we should return to the idea of the tax anti-circumvention clause.
At present, in order to interrupt the running of the period of tax statute limitation, tax authorities institute penal–fiscal proceedings in a given case, most often just before the end of the statute of limitation. The taxpayer is not notified of this fact, and – believing that the tax for the given year is under the statute of limitations – is surprised when receiving e.g. a due tax note from the tax office. Last year, the Constitutional Tribunal questioned these practices of the tax authorities (judgement of 17 July 2012, case reference P 30/11 – editor’s note). Will the respective regulations be amended and will taxpayers be informed that their taxes for a given year are not under the statute of limitation?
Indeed, the Tax Ordinance Act must be amended to take into account the arguments in the Constitutional Tribunal’s judgement . The Senate [higher chamber of the Polish Parliament] is working on a draft law in this area and we hope the amendments will be implemented soon.
Last year, the efforts of the Ministry of Finance focused mainly on tightening up the international tax agreements, among others in the area of exchange of fiscal information between administrative bodies from different countries. Will these works be continued?
A draft amendment to the Tax Ordinance Act, introducing a new directive on administrative cooperation in the field of taxation, will soon be presented to the Sejm [lower chamber of the Polish Parliament]. The draft will concern the exchange of tax information, cooperation in the EU in the field of service of letters and coordination of control.
In 2012, the Ministry of Finance worked on changes to the act on PIT and CIT, in its part concerning settlements of limited joint-stock partnerships. However, numerous comments to the draft amendments were lodged during the legislative process. What is happening to these ministerial proposals?
We will continue to work on the bill of the Act on corporate income tax, Act on personal income tax and some other acts. The concept – presented in the bill of the amending act – of two-level taxation of profits of limited joint-stock partnerships based on the rules applied to capital companies, with account taken, however, on the particular role played by general partners in limited joint-stock partnerships, will be maintained.
According to the bill to which comments were voiced, limited joint-stock partnerships would settle CIT, and they would be taxed both at the level of the partnership and at the level of the shareholder, e.g. when a dividend is paid out (the so-called double taxation). At present, such partnerships’ income is taxed at the level of partners, and their diverse status can be used to postpone the income tax obligation.
Additionally, the bill will be supplemented, among others, by provisions aimed at supporting innovative economy by introduction of a mechanism of voluntary transfer of 1% of CIT for the benefit of scientific institutions and universities, as well as by the shifting CIT and PIT tax on the income resulting from non-monetary contribution made to a company by universities, research institutions and natural persons (innovation creators) in the form of intellectual property.
What about income tax for farmers?
Next year, works on the introduction of income tax on agricultural activity will continue. These works have not yet been finished because of the complexity of the matter which has so far stayed outside the income tax system.
Will the approval for limitations in tax deductions on cars and fuel constitute a sufficient modification, and the Minister of Finance will not want to introduce further changes in this area?
The solutions included in the EU consent application have final character, despite a limited binding period has been specified, i.e., until 31 December 2018. Of course, they take into account the need to carry out periodical assessment of the applied solutions to allow for them to be extended for further periods.
It should however be noted that if the EU regulations specify the type of motor vehicle-related expenditure subject to limitation of the VAT deduction, the derogation granted to Poland might expire earlier.
Should taxpayers expect further changes in VAT?
If we obtain the EU approval , the regulations concerning the VAT deductions on cars and fuel will change. We are also analysing e the situation on the market of scrap metals and steel paying special attention to possible implementation of solutions preventing fraud. It is possible that such works will result in proposals of legislative changes.
Under the fourth deregulation act, the Minister of Economy wants to exempt pro bono publico legal services from VAT . Will the Ministry of Finance agree on that?
The Minister of Finance has already presented his opinion of the assumptions to the bill of the act on facilitating business activity. We see no need for changes in this respect.
The provision of legal assistance pro bono publico, i.e. voluntarily and free of charge, in public interest – particularly to persons who cannot afford such services – is perceived by the public as a selfless pro-social activity. It creates a positive image of the entrepreneur among the present and potential clients. It should therefore be recognised that such pro bono activity is part of the pursued business activity and is not VAT-taxable.
The Minister of Finance may issue a general interpretation of controversial matters the interpretation of which is difficult. . It serves then as the official interpretation, binding for all fiscal and revenue authorities. In 2012, 14 such interpretations were issued. Is the Minister of Finance working on other ones?
At present, a general interpretation on VAT taxation of benefits that are financed in part or in total from a company’s social benefit fund is under preparation. Following the judgement of the EU Court of Justice in the Kozak case (ref. number C-557/11 – editor’s note), the delivery of a general interpretation on tax on goods and services, concerning tourism services, , is currently analysed.
By Ewa Matyszewska