Is the opinion of the Head of the National Fiscal Administration binding on the Director of National Fiscal Information when refusing to issue an individual interpretation?

As a general rule, the Director of the National Tax Information Service (KIS) has no right to refuse to issue an interpretation confirming the applicant’s position or declaring it incorrect. There are, however, exceptions in which the authority may refuse to issue an interpretation by way of a decision. In order to refuse to issue an individual interpretation, the Director of the National Tax Information Service must first seek the opinion of the Head of the National Revenue Administration on the matter. Is this opinion binding on the National Tax Information Service? What is the view of the case law of the Provincial Administrative Courts and the Supreme Administrative Court on this issue?

Pursuant to Article 14b §5b(1), an individual interpretation shall be refused, by way of a decision, in respect of those elements of the facts or future events in relation to which there is a reasonable presumption that they may constitute an act or an element of an act specified in Article 119a §1. The act referred to in Article 119a of the Tax Ordinance is tax avoidance. The Director of the National Tax Information Service, wishing to issue a decision refusing to grant an individual interpretation, must – having formed a reasonable suspicion of tax avoidance – request an opinion from the Head of the National Tax Administration. The subject of this opinion is the factual situation (future event) described in the application, considered in the context of tax avoidance. This is where a fundamental doubt arises: is the Director of the National Tax Information Service bound by the opinion of the Head of the National Tax Administration, or may he issue an interpretation or refuse to issue one even if the Head of the National Tax Administration takes a different view?

Administrative courts generally hold that the Director of the National Tax Information Service is bound by the opinion of the Head of the National Revenue Administration. In the judgment of the Supreme Administrative Court of 26 April 2022 (case no.: II FSK 1983/19), the Court stated:

If the Head of the National Revenue Administration confirms in his opinion the justified suspicion of the interpreting authority, the latter – bound by that opinion – may not issue an interpretation. If, however, that opinion is negative, the interpreting authority may not refuse to issue an interpretation by invoking Article 14b § 5b of the Tax Ordinance.

The Supreme Administrative Court has taken a similar stance in many other judgments. Examples include: the judgment of the Supreme Administrative Court of 20 October 2020, ref. no.: II FSK 2924/18, and the judgment of the Supreme Administrative Court of 19 February 2020, ref. no.: II FSK 3544/18.

However, a different view can be found in the case law of the Supreme Administrative Court. Thus, in its judgment of 20 May 2022, ref. no. II FSK 2073/20, the Supreme Administrative Court stated:

It should be emphasised that the wording of Article 14b § 5b of the Tax Ordinance merely imposes an obligation on the authority to request an opinion where it has reasonable grounds to suspect that elements of the factual circumstances or a future event may be the subject of a decision under Article 119a of the Tax Ordinance. The legislator uses the expression ‘shall request’. However, whilst requiring such an opinion to be sought, the legislator did not define its nature nor explicitly indicate that it is binding on the interpreting authority. Being bound by the opinion of the Head of the National Revenue Administration, issued pursuant to Article 14b § 5c of the Tax Ordinance, would mean that it would suffice to refer in the grounds of a decision refusing (pursuant to Article 14b § 5b of the Tax Ordinance) to issue an interpretation to the content of that opinion, which would render the review of decisions by administrative courts in this regard illusory.

Similarly, certain Provincial Administrative Courts have expressed a view regarding the non-binding nature of the Head of the National Revenue Administration’s opinion. The Provincial Administrative Court in Wrocław, in its judgment of 29 June 2022, ref. no.: I SA/Wr 181/22, stated:

It should be noted and emphasised that the Head of the National Revenue Administration is not the competent authority for assessing an application for an individual interpretation; he merely cooperates with the Directorate for Tax Interpretation and Supervision (DKIS), on whose initiative he presents his assessment of the matter in the form of an opinion. An opinion does not constitute a decision on the matter, which would in fact be the case if the DKIS, bound by it, merely reproduced in its decision the position of the Head of the National Revenue Administration that is binding upon it.

The same position can be found in several other judgments of Provincial Administrative Courts. One may refer here to the judgment of the Provincial Administrative Court in Wrocław of 7 November 2023, ref. no.: I SA/Wr 217/23, or the judgment of the Provincial Administrative Court in Gdańsk of 4 October 2022, ref. no.: I SA/Gd 876/22.

However, this view is an exception in administrative case law. As a general rule, the Supreme Administrative Court and the Provincial Administrative Courts hold that the opinion of the Head of the National Revenue Administration is binding on the Director of the National Tax Information Service.

It is also worth remembering that an appeal may be lodged against a decision by the Director of the National Tax Information Service refusing to issue a request, and the decision of the second-instance authority may be challenged before the Provincial Administrative Court.