Individual tax ruling – a way to address tax doubts? [1 of 2]
August 1, 2023
Entrepreneurs planning to start a new business venture often wonder what effects it will have in terms of tax. In such situations, they most often turn to a tax advisor to analyze the transaction and issue an opinion. However, it is worth remembering about one more possibility – an individual tax ruling. We present the first part of the FAQ on individual interpretations of tax law.
1. What is an individual tax ruling?
In the simplest terms, individual tax ruling is the official position of the Polish tax authorities as to the tax consequences of a given case.
2. Who issues tax rulings?
Interpretations regarding such taxes as CIT, PIT, VAT, PCC – regardless of the place of the taxpayer’s registered office or residence – are issued by the Director of the National Tax Information (Dyrektor Krajowej Informacji Skarbowej). If we have doubts as to the understanding of e.g. one of the provisions on real estate tax – the tax interpretation will be issued by the head of the commune, mayor or president of the city, respectively.
3. Where can I find the provisions on individual tax rulings?
The provisions governing the rules for applying for individual tax interpretations are contained in Chapter 1a of the Act of August 29, 1997. Tax Code. We use these regulations regardless of what tax we want to ask about.
4. How long does it take to issue a ruling?
Ustawowy termin na wydanie interpretacji to 3 miesiące. Liczony jest od dnia wpływu wniosku do Dyrektora KIS, wójta, burmistrza czy prezydenta miasta. W trakcie procesu wydawania interpretacji możemy zostać wezwani do uzupełniania stanu faktycznego czy własnego stanowiska w sprawie. Czas ten nie wlicza się do wskazanego powyżej 3 miesięcznego okresu.
The statutory deadline for issuing a ruling is 3 months, counted from the date of receipt of the application by the Director of KIS, head of the commune, mayor or president of the city. During the process of issuing the interpretation, we may be called upon to supplement the facts or our own position on the case. This time is not included in the 3-month period indicated above.
5. What question can I ask for the ruling?
In the application for an individual tax ruling, we can describe any case. It can be both a planned project and the actual state of affairs. The request for interpretation may only concern Polish tax law, including tax avoidance agreements. Therefore, we cannot ask, for example, how French corporate income tax regulations are understood. An important restriction: we cannot apply for an interpretation regarding our case that has already been resolved in tax proceedings or is the subject of such proceedings. In the application for an interpretation, we cannot ask about issues concerning the jurisdiction and obligations of the tax authorities.
6. How do I apply for an individual tax ruling?
An application for a binding ruling can be submitted using the ORD-IN application template. However, it is not obligatory. We can prepare the inquiry ourselves. It is important that it contains all the elements provided for by law.
7. Do I have to present my own stance on a given case in the ruling?
Yes – an indication of your own understanding of the tax law in a given case is an obligatory element of each application.
8. How much do I have to pay for the individual tax ruling?
Currently, the cost of issuing the ruling amounts to PLN 40 for each factual state that we describe in the application.
Important! The fee for issuing an interpretation does not depend on the number of questions asked, which we include in the application. We can ask any number of questions regarding one factual state – this will not affect the amount of the fee. Only if we want to describe several cases within one application (e.g. several variants of a given project), we will have to pay a multiple of PLN 40.
Currently, the Ministry of Finance has announced planned changes to the fees for issuing applications for interpretation – for the largest taxpayers, the fee may increase up to PLN 2,800.
Still eager for more knowledge about the individual tax ruling? Go to the part 2:
