Tax and Fiscal Inspection in Poland
dr Maria
Jankowska
The University of Economy
Bydgoszcz (WSG)
Every country has
special services appointed to control and supervise diverse areas of life. The
Polish services include tax and fiscal inspection. While the former is
committed to checking whether the controlled persons fulfil obligations
proceeding from tax regulations, the latter is devoted to protecting the
interests and property rights of the State Treasury and state property wherever
used.
It is tax inspection that taxpayers
and tax remitters deal with most often. However, they happen to face fiscal inspection as well. In spite of a number of
similarities, tax inspection and fiscal inspection constitute independent
offices.
Tax inspection is
regulated by the provisions entailed in Division VI of the General Tax Law of
29 August 1997 – Act on Rules for Taxation[1]
and the Act of 2 July 2004 on Freedom of Economic Activity[2]
which introduced limitations to the control of entrepreneurs.
It serves to check whether the
controlled persons (taxpayers, tax remitters, tax collectors and tax
successors) fulfil obligations proceeding from tax regulations.
Tax inspection is
carried out by tax authorities of first instance, that is: chief of tax office, chief of customs office,
administrator of the village, major (president), starost and marshal of the
province.
The Minister of Finance, however,
exercises tax control to check the application of the method of setting
transaction price between connected entities recognised by the tax
authorities.
Tax inspection initiates the
verification of correctness of the taxpayer’s settlement with budgets (i.e. the
State Budget and local budgets). Verification activities may be completed at
the stage of inspection. However, once tax authorities detect inaccuracies,
verification continues and tax proceedings are instigated.
Fiscal inspection
regulated in Article 1 of the Act on Fiscal Inspection[3]
aims at protecting the interests and property rights of the State Treasury,
securing the satisfaction of tax liabilities and other dues which constitute
income of the state budget or state purpose funds, examining the lawfulness of
property management of other state legal entities, counteracting and fighting
against breaches of law in force concerning the turnover of goods with foreign
partners and turnover of foreign goods, preventing and disclosing passive and
active bribery, agency in lieu of property or private benefits, paid support
from people in high places, professional malpractice of the persons employed or
serving in organizational units subject to the Minister of Finance.
Fiscal inspection
includes:
1)
controlling
reliability of the declared tax bases and correctness of estimating and paying
taxes which constitute income of the State Budget, and other dues of the State
Budget or state purpose funds;
2)
disclosing
and controlling undeclared economic activity and income which does not
correspond to the revealed revenue sources;
3)
controlling the property sources in the cases
of undeclared economic activity, and income which does not correspond to the
revealed revenue sources;
4)
controlling
functionality and lawfulness of management of refundable public means, EU means
and means from international financial institutions;
5)
controlling
compliance to financing assistance using the means mentioned in clause 4;
6)
controlling
correctness of the transfer of own means to the EU budget
7)
issuing
certificates and declarations of the completion of financial assistance from
the EU
8)
controlling
functionality in the course of decision making and lawfulness of the use and
disposal of the state property, and in particular disclosing deficiencies and
damage done to the property;
9)
examining
the use of the property from the State Treasury to carry out public tasks and
correctness of the State Treasury privatization;
10)
controlling
reliability of the fulfillment of liabilities proceeding from securities and
guarantees provided by the State Treasury;
11)
controlling
compliance of the use of means secured or guaranteed by the State Treasury with
their purpose
12)
controlling
lawfulness of the import of goods to the Republic of Poland for turnover or
other customs purposes, and the export of goods outside the territory of the
Republic of Poland, controlling the turnover of foreign goods, controlling and
disclosing goods illegally introduced to the Republic of Poland;
13)
disclosing
property elements of entities obliged to pay public dues, or suspected of deeds subject to a fine or financial
punishment to secure the collection of dues, as well as enforcement of court
decisions and fines;
14)
controlling
property statements of the persons employed and serving in the customs
administration units, tax and fiscal inspection units subject to the minister
competent in matters of public finance, and the minister’s office;
15)
controlling
customs administration units, tax and fiscal inspection units subject to the
minister competent in matters of public finance, and the minister’s office;
16)
checking whether residents and non-residents
comply with the limitations and obligations specified in the foreign exchange
law, and conditions for foreign exchange activity;
17)
carrying
analytical and prognostic activities concerning negative phenomena of fiscal
inspection and presenting the relevant information and analysis to the
government administration units.
Fiscal control also includes
examining reliability of the declared tax bases, as well as correctness of
estimating and paying tax liabilities which constitute the income of the local
government units.
The following are
subject to fiscal control:
1.
persons
obliged to pay pecuniary performance for the benefit of the State Treasury or
state purpose funds;
2.
persons
dealing with returnable public means, EU means and means from international
financial institutions;
3.
persons
in charge of the state property;
4.
units
using the property given by the State Treasury to realize public tasks, and
privatized property of the State Treasury;
5.
beneficiaries
of securities and guarantees given by the State Treasury and entities secured
and guaranteed by the State Treasury;
6.
persons
employed and serving in the customs administration units, tax and fiscal
inspection units subject to the minister competent in matters of public means,
and the office of the minister, obliged to provide property returns;
7.
customs
administration units, tax and fiscal inspection units subject to the minister
competent in matters of public means, and the office of the minister,
Taxpayers, collectors
of taxes and other dues are subject to fiscal inspection.
The most fundamental
task of tax inspection is to control whether taxpayers, tax remitters, tax
collectors and tax successors fulfil their obligations proceeding from tax
regulations.
The controllers, within the scope of
their authorization, are entitled in particular to[4]:
1. enter the land, buildings,
offices and other premises of the controlled person,
2. enter residential premises – tax
authorities may carry out the examination of the residential premises or some
part of it, once it is deemed indispensable to verify the actual state of
affairs with the data declared by taxpayers in the tax return and other
documents testifying to the incurred expenses on housing,
3. demand to be presented with and
to examine the controlled property/assets,
4. demand to be presented with the
files, books and other documents concerning the subject of inspection, and make
authorized and unauthorized copies, abstracts, notes, printouts and documented
withdrawal of data in the electronic form,
5. collect other indispensable
materials concerning the subject of inspection,
6. secure indispensable evidence,
7. check ID of the controlled
persons, once deemed indispensable for control,
8. demand inventorying,
9. examine the controlled person,
witnesses and proxies representing the controlled person and conducting his
business, as well as his employers and collaborators,
10. consult experts.
The controllers may also demand to
receive the following on receipt[5],
for the period of inspection:
1.
samples
of goods,
2.
files,
books and other documents concerning the subject of inspection:
a.
once
they are justly deemed unreliable
b.
once
the taxpayer fails to provide the controllers with the conditions proper for
inspection of the very documentation, and in particular fails to provide the
controllers with separate room and place to store documents.
The controllers are also entitled to
examine the files of preparatory proceedings and court proceedings, court
files, as well as documents with state, office and professional secrets, and
make their authorized copies and notes.
In
justified cases, once resistance preventing or hindering control is
encountered, controllers may address (in emergency cases also orally) the
Police, Border Guards and Municipal Guards (Communal Guards), or request their
company once the occurrence of such resistance is deemed possible. Once
resistance is encountered on part of a soldier from active military service,
controllers hold the right to address the competent military body except for
cases in which the default on payment may prevent inspection and no military
body can be found on the spot. The abovementioned bodies can refuse neither
assistance nor company. The Minister competent in internal matters is obliged,
by the Act on Tax Regulations, to define together with the Minister of Defence
detailed duties of the assisting and accompanying bodies, the course of
assistance and company, the method of documenting the course of assistance and
company and capacity of the local assisting and accompanying bodies. Those
obligations were introduced by the Minister through the directive of 1 April
2003 concerning the assistance and company of the Police, Border Guards and
Municipal Guards and military bodies to the tax authorities in the case of
inspection[6].
Controllers
have the right to enter the controlled area, buildings and residential premises
in order to[7]:
1.
carry
out examination if:
a.
the
controlled area, buildings and residential premises are indicated to serve as
the base for economic activity or base of the controlled person,
b.
deemed
indispensable to define tax liability and tax base,
c.
deemed
indispensable to verify the expenses on housing entitling tax reliefs.
2. carry out examination or search
of residential premises, other premises and things once the information on the
undeclared economic activity occurs, or once things, tax books, files and other
documents crucial for defining the existence of tax obligation and the amount of tax liability are stored there.
Examination and search of
residential premises, other premises and things may be carried our by the
authorized tax authorities with the regional Prosecutor’s consent received upon
motion of tax authorities. Before the commencement of inspection the controlled
person should be presented with the Prosecutor’s decision of consent. The
Criminal Code[8] regulations
on the Police search apply also to the controllers. The controlling activities
require drawing up a protocol to be accepted by the Prosecutor. If not
accepted, materials and information gathered in the course of action do not
constitute evidence in the tax proceedings[9].
If
property, its part or things are in the possession of third parties, third
parties are obliged to make them accessible upon demand of tax authorities[10]
for search or examination.
If
tax books are recorded or stored outside the controlled person’s base,
controllers are entitled to demand access to them in the controlled person’s
base, or the in place where they are recorded or stored once current economic
activity[11] may be
thwarted in the controlled person’s base. The abovementioned right applies in
the case when the controlled person conducts economic activity in the
residential premises.
The controller may
address the controlled person who is a natural person to submit a property
statement on a particular date, if it is justifiably suspected that the
controlled person has not revealed all the income and revenues crucial for
defining or establishing the tax liability[12].
The scope of control cannot exceed
the one stipulated in the registered authorization[13]
by name.
The course of inspection is
documented in the protocol. Once the controlled person disagrees with the
records of the protocol, he has the right to express reservations or
explanations within 14 days from the reception of the protocol, presenting
relevant evidence.
The date of the completion of
inspection is the date of the receipt of the protocol.
In the case of fiscal inspection the
principle of active participation of the party is in force. According to this
principle, the fiscal inspection body enables the party’s (the controlled
person) active participation in each and every stage of the proceedings, and
through decision the expression of opinion about the evidence and materials
gathered, as well as the demands submitted[14].
Tax authorities are entitled to gather and use information, including personal
data, for the fulfillment of the statutory obligations, and process it within
the regulations concerning personal data protection, without knowledge or
consent of the person it concerns.
The principal
obligation of the controlled taxpayer is to enable the fiscal inspector to
carry out controlling activities. The obligations of the taxpayer include in particular free:
-
provision
of access to buildings, equipment and property elements within the scope of
inspection,
-
provision
of access to documentation and registers within the scope of inspection,
-
films
and photos, as well as sound recordings if films, photos or sound recordings
may constitute evidence, or add to other evidence in the controlled cases,
-
translation of the financial accounting
documentation into the Polish language, on demand of the inspector,
-
inventorying
on demand and within the scope stipulated by the inspector,
-
provision
of conditions suitable for the work of inspectors, separate room and space to
store documentation if possible.
Additionally, in the case of control carried
out by fiscal inspectors, the taxpayer is obliged to, among others, prepare
copies of documents stipulated by the inspector, guarantee communication, as well as other necessary
technical means used for controlling activities.
The owner of goods is obliged to carry out
controlling activities, in particular to unload, present and load goods after
the completion of inspection[15].
The owner is entitled to a claim to the Chief
of the Fiscal Office on the legitimacy and procedure of the abovementioned
activity [16].
If the taxpayer cannot be present during
control, he has the right (obligation) to provide in writing the name of the
person authorized to act on his behalf.
A protocol is drawn up by the fiscal office
inspector or workers concerning controlling activities carried out in the
absence of the taxpayer, and to be immediately presented to the taxpayer.
After
taking a stance towards explanations and reservations the Fiscal Office is
obliged to present the taxpayer with the documents and final conclusions. Then
within the course of 3 days the taxpayer has the right to demand to supply
documentation, evaluate the documentation gathered once more, and demand the
possible verification of the final conclusions.
After considering reservations, the
Fiscal Office Inspector issues a decision – if the final conclusions refer to
taxes and other budget dues (a different tax due has been defined), or the
control result, if no inaccuracies have been detected or the detected
inaccuracies do not refer to taxes.
4. Conclusion
Nowadays tax and fiscal inspection do not
constitute identical legal offices , though their aim and scope are the same at
numerous levels. Undergoing either tax or fiscal control, taxpayers face
specific courses of action.
The state efforts to unify the controlling
procedures, rights and obligations of the controlled persons and the
controllers and all positive.
However, constant novelties make it hard for
the parties to follow.
Summary
The article is devoted to tax and
fiscal inspection in Poland. It presents rights and obligations of the
controlled persons and controllers. It also draws attention to the shared areas
between the two kinds of inspection, and the individual areas that separate tax
and fiscal inspection.
References
[1] Jednolity tekst: Dz. U. Nr 8 z 2005 r., poz. 60 z późn.
zm.
[2] [2] Dz. U. Nr 173 z 2004 r , poz. 1807
[3] Dz.U. z 2004r. Nr 8, poz. 65 z późń. zm.
[4] Art. 286 §1 par. 1-10 O.p
[5] Art. 286 §2 ust. 1-2 O.p
[6] Dz. U. Nr 65 z 2003r , poz. 611.
[7] Art. 288 §1 ust. 1-2 O.p.
[8] Dz. U. Nr 89 z 1997r., poz. 555 z późn. zm.
[9] Art. 288 §2 O.p.
[10] Art. 288 §4 O.p.
[11] Art. 285a §1.
[12] Art. 285a §3.
[13] Art. 79 ust. 5 ustawy z dnia 2 lipca 2004 r. o swobodzie działalności gospodarczej, tj. Dz. U. Nr 173 z 2004 r.,
poz. 1807
[14] Art. 123 i 200 O.p. w zw. z art. 31 u.k.s.
[15] Art. 11a ust. 3 u.k.s.
[16] Art. 11a ust. 4 u.k.s.