On March 15, the Council of Ministers will discuss the draft of an amendment to the Tax Ordinance, the aim of which is to introduce the anti-tax evasion clause. The Ministry of Finance wants it passed as quickly as possible, as the clause is seen as an important element of tightening the tax system.
The objective of the clause is to stop taxpayers using the so-called “aggressive tax optimization”, which involves economically unjustified activities leading to tax benefits. Although this is not the first attempt to introduce a tool to combat tax evasion, the new government’s palpable determination suggests that the draft will be passed soon.
The biggest controversies concern not the regulations of the instrument, but their later practical application. Entrepreneurs are concern that the tax administration, which is not always friendly, will use the clause against them. As a result, law-abiding entrepreneurs could be faced with the clause despite the fact that they did not intend to evade taxation. The risk stems a. o. from the fact that the draft includes many insufficiently specific terms, giving the officials much freedom in interpreting the regulations. Moreover, it is possible that conflicts will arise between taxpayers and tax authorities with regards to the interpretation and justifiability of some business decisions which could be questioned and considered economically unjustified.
However, efficient combat against tax evasion should be one of the priorities of relevant state administration institutions, as the unlawful actions of some entities not only harms the State Treasury, but also interferes with the conditions for just competition. Therefore, in order to eliminate the risk for taxpayers, tax administration employees should be briefed on how to apply the clause, as well as on modern business management models. Proceedings related to applying the anti-tax evasion clause should be conducted only by the best expert among officials.
The Tax Committee of Employers of Poland