Tax proceedings

Tax proceedings are conducted based on the regulations of the Tax Ordinance. They are undertaken in cases in which it is necessary to issue a decision setting the amount of tax due.

Tax proceedings are two-tier procedures, meaning that a taxpayer who does not agree with the decision of the first instance has the right to appeal the decision. Appeals are considered by the organ to which the organ issuing the decision is subordinate. If in a given case, the organ of the first instance has issued an order, then the means of appeal available to the taxpayer is a complaint against this order.

Tax proceedings must be conducted based on principles set forth in legislation, the most important of which is conducting matters in a manner increasing the confidence of the citizen towards tax authorities, as expressed in Article 121 § 1 of the Tax Ordinance. It is important to note at this point that the tax authority may not conduct its proceedings with the aim of imposing the highest possible tax. The tax authority is obliged to impose tax payments in the correct amount. This is a direct result of the principle of strict interpretation of tax regulations, which in consequence means that taxes may not be imposed better or worse, or more or less favorable for the State Treasury. Taxes may only be imposed either correctly or incorrectly.

It is crucial in tax proceedings to establish the facts of the case; what precisely happened, which events took place and which did not. The evidence in tax proceedings may be anything that can clarify the situation. Most often these are of course documents, in particular accounting documents, photographs, the testimony of witnesses, or the opinions of experts.

In order to conduct, more in-depth, analysis of the collected material, the organ may, as necessary, mandate an administrative hearing, during which witnesses and experts may be examined, and parties may submit clarifications, react to evidence, question experts and witnesses, announce demands, propositions and charges, as well as submit supporting evidence.

Generally speaking, proceedings end with the issuing of a decision. In preliminary cases, which the organ decides on in the course of proceedings, orders are issued. Tax decisions may contain a binding ruling on the tax due, or if for any reason its issuance has become irrelevant, a decision cancelling the proceedings may be issued.

Both decisions and orders must include instructions for the party on how to contest the decision. The methods of contest vary depending on the organ issuing the decision. As was mentioned earlier regarding decisions of the first instance, a party has a right to appeal to the second instance. With respect to an order of the first instance, a party has the right to submit a complaint to the second instance. In response to the submitted appeal or complaint, the organ of the second instance issues a new decision or new order. These respective rulings are final in the administrative course of instances, and as such may be contested in administrative court. Thus, decisions or orders issued by second instance are eligible to be contested in the Administrative Court [Wojewódzki Sąd Administracyjny]. This embodies the rule that in order to take one’s case to the Administrative Court one must first exhaust the administrative course of instances.