We pay taxes on nearly everything we do. Every time we put money into or take money out of our wallets, the necessity to pay some sort of tax arises, from the banal and everyday, such as VAT tax, through those less frequent taxes on inheritance or gifts, to taxes on civil law transactions.
Effective action in the field of tax law requires first and foremost scrupulous attention to detail. Tax law proceedings are a subdivision of administrative proceedings, and thus are subject to the principles of administrative law. In this field, there is an enormous disparity means and methods of the two parties; one party is a natural person or legal entity, and the other is the state, which has at its disposal an enormous bureaucratic infrastructure. Administrative law comprises a series of procedural rules which aim to equalize the position of the citizen with regard to the state.
The classification of tax law as a subset of administrative law, and the regulations of the Tax Code itself, allow us at least in part to return the balance between the state and the citizen. The effective exploitation of this powers in tax proceedings has a tremendous impact on the final outcome. Many queries and doubts on the part of the inland revenue can often be resolved even before administrative court proceedings begin.
Tax law, like most other branches of law, can be divided into different subsets; substantive law, which defines the amount of tax due and forms the basis for decisions issued by tax authorities, and law regulating tax proceedings, which defines the way in which possible disputes regarding the amount of tax due are resolved.
Legislators have provided a means for avoiding unpleasant financial consequences resulting from a negative outcome of a dispute for the individual in the form of Article 14b of Polish Tax Ordinance, which awards taxpayers the possibility of conducting such a dispute in advance of the presumed tax event. This allows taxpayers to establish legal certainty of their tax situation.
If, as a result of tax proceedings, a decision is issued which is unacceptable to the taxpayer, it is possible to dispute the decision in further proceedings with the relevant tax appeals body. If the tax authorities of both instances do not adequately respect the rights of the taxpayer, it is also possible to question the legality of the decision in administrative court proceedings.
The basic principle which the organs of the state must abide by in the application of tax law is to build the confidence of the citizen towards the state. In practice, this means that tax decisions must conform to applicable current law, may not be contrary to the vital interest of the taxpayer nor lead to his or her bankruptcy or deprive him or her of a means for survival. As regards the process for issuing decisions and for proceedings before the tax authority, this means that the tax authority should conduct its affairs so that the final effect of its actions are comprehensible to the taxpayer, and so that the tax authority is able to convince the taxpayer of the pertinence of its decision.