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The number of tax and customs controls in Poland is increasing. Is there a reason to be afraid?

9 January 2023

The number of tax and customs controls in Poland is increasing. Is there a reason to be afraid?

Reading time: 3 minutes.

 

From this article you will learn:

  • what are the causes and the effects of an increasing number of tax and customs controls;
  • what is the implementation of the regulations concerning the System of the Reconciliation Chamber (STIR);
  • what should bring the attention of the taxpayers during the interactions with tax and customs authorities.

 

Karolina BARTKOWIAK
Junior Tax Manager at RSM Poland

 

Polish officials carry out more and more tax and customs controls

The information published by Poland's Ministry of Finance shows that the number of tax and customs controls is successively increasing. In the first half of 2022 there have been almost two thousands of such controls – it is almost 300 more than in the same period of 2021.

The aim of the majority of those tax and customs controls is to detect errors in the taxpayer’s goods and services tax settlement.

An increase in the number of ongoing tax proceedings and tax and customs controls is on one hand, the effect of the government’s aspirations to tighten the tax system. On the other hand, the aftermath of the implementation of a series of instruments that have been introduced to the Polish tax system. We are talking about such solutions as, for example, electronic reporting of Standard Audit File for VAT (JPK_VAT), a mechanism of split payment, so called The White List of VAT taxpayers or the System of the Reconciliation Chamber (STIR). These activities have lead to the automatisation of verifying a large amount of data and detecting the errors in the tax settlement on an earlier stage.

The goal – tightening the tax system

The solution mentioned aims at tightening the Polish tax system– especially regarding the value added tax.

The Ministry of Finance points out that the estimated level of the Polish VAT gap in 2020 is 10,4 %. This number – according to the national estimations – dropped in 2021 to 4,3 %. Based on predictions, the VAT gap can still decrease thanks to an increasing number of tax and customs controls, as well as the implementation of the National e-Invoice System, which was also described on our blog.

However, the VAT loophole is calculated by different methodologies, which are regularly modified. The value added tax is tightly linked with changes in the business environment, changes in consumers’ behaviour and characteristics of subjects being sold.

The dynamic environment of the VAT causes the frauds related to it change their form extremely quickly. It can be supposed that automated devices will result in increasing the number of random controls.

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More and more blocks on bank accounts

According to the reports published by The Ministry of Finance – with the use of the System of the Reconciliation Chamber (STIR), the blockages on the taxpayers’ accounts are more common.

Let’s remind that on the basis of the Tax Code, the Head of the National Revenue Administration (Krajowa Administracja Skarbowa, KAS) received permission to collect the data covering the information about the accounts of eligible entities, operated by the banks and the cooperative savings and credit unions, as well as the transactions from those accounts. Among the authorisations of the head of the KAS there is also the possibility to demand the blockage of an account for 72 hours if provided information shows that the activity of banks or credit unions can be used by an eligible entity for purposes related to fiscal fraud or the activities aimed at fiscal fraud and the blockage of the account is required to prevent it.

In justified cases, the head of KAS can extend the blockage of the account for a specified period, but not longer than 3 months.

The conducted statistics show that from May to December 2018 there have been 41 account blockages. In the next years, this number has successively increased, in 2019 there have been 566 account blockages, whereas in 2020 – 1020 blockages. Almost all of the blockades have been extended by the head of KAS and lasted longer than 72 hours (maximum 3 months).

Do Polish taxpayers have a reason to be afraid?

Although detecting errors and preventing tax or fiscal frauds is definitely valid, the solutions applied by the tax and custody authorities can significantly affect the taxpayers who want to account their business in a proper way. As an example, we can mention an increasing number of reporting, verifying and administrative obligations on the taxpayers.

Due to tightening of the tax policy, and therefore more severe practices of tax and custody authorities, getting the support of a professional tax consultant since the earliest stage of the proceeding or the control is not only a wise solution, but sometimes even a required one. It is important to be aware that Polish officials don’t always act within their powers, sometimes even violate the current regulations. We have already mentioned that several times in our blog notes cycle „Courts side with taxpayers”.

In the next entries our team Tax Litigation will introduce the cases of infringements which are often committed by the tax and custody authorities with regard to doing their job. If the taxpayer notices them at a properly early stage, it can change the course of the proceedings in favour of the entrepreneur. Professional service of the dispute also helps to save a lot of time and money. We encourage to read the following entries, in the case of a necessity to discuss the topic – to contact our experts.

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Junior Tax Manager

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