What were tax authorities said to do in 2011?

The Minister of Finance complied with a judgment of the Provincial Administrative Court in Warsaw and disclosed to the HFHR the document entitled “Responsibilities of Tax Audit Offices for 2011”. The disclosure concludes one of the two Foundation’s legal disputes with the Finance Ministry.

The case hit the headlines in 2012 when the media reported that tax audit offices received an official guidance setting out minimum thresholds of effectiveness of tax audits to be performed over the next year. The HFHR applied to the Ministry of Finance for the disclosure of the document in question. The Ministry refused, citing tax confidentiality. Ultimately, the case was brought to an administrative court. In December 2013, a Provincial Administrative Court affirmed the decision that denied access to the document.

In the meantime, the HFHR applied for the disclosure of the similar document for the year 2011. Once again, the Ministry refused disclosure, citing tax confidentiality. In October 2014, the Provincial Administrative Court in Warsaw revoked the non-disclosure decision and remanded the case to be re-examined by the Ministry. Having reconsidered the Foundation’s application, the Minister of Finance decided to disclose the document.

The tax audit guidance document for 2011 publicised by the Ministry does not contain any explicit wording that would establish minimum requirements of tax audits effectiveness. It merely informs that in 2010 the ratio of “positive tax audits” reached the level of 70%, which means that seven out of ten audits ended with a decision being issued by the tax authority or a tax return being voluntary filed by the audited taxpayer. The document is available for viewing here.

It is yet to be determined if audit effectiveness thresholds had in fact been set for the year 2013. The HFHR is still involved in the active litigation related to a similar document for 2013. In that case, the Foundation has already complained to a Provincial Administrative Court and is currently awaiting the decision. The complaint will be heard on 18 March 2015 at 1.30 pm, in Courtroom B.