Polish Deal – Part 1. New competencies for the National Revenue Administration

The announced draft changes to the Act on the National Revenue Administration aims at providing new tools for National Revenue Administration (NRA).

Warning about suspicious entities

Tax authorities, in the course of their daily activities, collect a broad spectrum of information from all of the taxpayers. The proposed changes include a new competence for the Head of the NRA to optionally inform a taxpayer about the fact that among his suppliers there is a potential “missing taxpayer”. The missing taxpayer is defined as an entity registered for VAT purposes that actually trades or provides services or only simulates trading or rendering services in order to defraud VAT. Usually, after a number of transactions, such an entity is liquidated without fulfilling any tax obligations.

When carrying out transactions, taxpayers are required to exercise due diligence in selecting their counterparties, and it is not uncommon for them to be held liable for their involvement in carousel fraud, despite being unaware of the criminal activities of their business partner. This new regulation is supposed to minimise such cases, but it remains to be seen how effective it will be in practice.

Verifying acquisition

What we may expect? Purchase of goods or services by an authorised tax officer who will check whether a taxpayer actually records its sales on a fiscal cash register and issues a receipt. NRA officer shall perform the activity without informing the taxpayer about it in advance, and only after the purchase is made, the authority will inform about the fact of the conducted control.

Temporary seizure of movables

The purpose of the proposed solution is to allow NRA officers, who e.g. in the course of other actions disclose valuable items in the debtor’s assets, to temporarily seize them. Tax arrears have to exceed PLN 10k (principal amount, excluding interest, etc.). The value of the seized movables has to be proportionate to the amount of the debt.

The movable may be seized up to 96 hours. During this time, the case should be forwarded to the enforcement authorities and for the formal issuance of the seizure decision.