The draft of the act amending the Tax Ordinance from December 30th 2015 once again includes an anti-tax evasion clause. However, yet again the regulations are imprecise. Will the clause in its current form meet its objectives?
The first thing that should be highlighted is the definition of a “tax benefit”. According to the authors, the lack of a tax obligation or a delayed deadline of regulating an obligation, decrease in tax the establishment of a surplus or a right to tax deduction are tax benefits. It should be emphasized that elements of this definition can apply to actions that are fully in accordance with the law.
The draft includes numerous imprecise terms which are not sufficiently defined neither in the Tax Ordinance, nor in other tax-related acts. These term include a.o.: the aim of the tax act, appropriate action, reasonable action. Every one of a taxpayer’s economic objectives can indirectly or directly influence the scope and value of taxation. Passing the act in its current form would mean that taxpayers would have to meet the objective of the act first and only then take care of their business strategy.
Changes include the establishment of a new institution – the Tax Evasion Council. It is intended as collegial, expert body tasked with judging the appropriateness of applying the clause in individual cases. However, the composition of the Council does not guarantee that it will be independent and favours representatives of the government and local governments. Only 2 of 7 members will ot represent the administration.
All in all, it should be emphasized that efficiently combatting tax evasion should be one of the priorities of relevant state administration organs. However, entrepreneurs’ objections with regards to arbitrary and unjustified application of the clause appear to be well-founded. A draft introducing changes of such importance should be meticulously prepared. Therefore, a thorough discussion on the draft in question is needed, so that the final form of the regulation guarantees the realization of the act’s objectives without exerting negative influence on the functioning of law-abiding entrepreneurs.
Łukasz Czucharski, expert of Employers of Poland