In accordance with Article 55(1) of the Public Procurement Law, the total duration of all inspections carried out by the supervisory authority at a business’s premises in a single calendar year must not exceed, in the case of:
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micro-enterprises – 12 working days;
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small businesses – 18 working days;
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medium-sized businesses – 24 working days;
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other businesses – 48 working days.
Paragraph 2 sets out a list of situations in which the above time limits do not apply. Particular attention should be paid to the ground most frequently invoked by the tax authorities (Article 55(2)(2) of the Tax Administration Act), namely that an audit is necessary to prevent the commission of a criminal offence or a misdemeanour, to prevent the commission of a fiscal offence or a fiscal misdemeanour, or to secure evidence of such an offence. Tax authorities frequently invoke this ground as a basis for waiving the requirement to give notice of their intention to initiate an audit and for disregarding its time limits, even where it is doubtful whether the circumstances provided for therein can actually be applied.
Pursuant to Article 55(3) of the Tax Audit Act, the duration of an audit may only be extended for reasons beyond the control of the auditing authority and requires a written justification, which must be served on the audited business. Importantly, the extension of the audit duration itself must not breach the time limits referred to above.
Similarly, an extension of the audit pursuant to Article 55(4) of the Tax Audit Act, which states that this is possible if, in the course of the audit, an understatement of tax liability is revealed in an amount exceeding the equivalent of 10% of the declared tax liability, but not less than PLN 500, or an overstatement of a loss in an amount exceeding 50% of the declared loss, but not less than PLN 2,500, or in the event of the discovery that a return has not been filed despite such an obligation. In such cases, the extension may not result in the time limits specified above being exceeded by more than twice their duration.
In accordance with the position of case law, the provision of Article 291c of the Tax Ordinance, in the context of a tax audit conducted at a business, results in the recognition that the provisions of the Business Law Act (formerly the Act on Freedom of Economic Activity) are specific provisions in relation to the provisions of Articles 281–292 of the Tax Ordinance (see: judgment of the Supreme Administrative Court of 5 October 2010, ref. no. I GSK 971/09; judgment of the Supreme Administrative Court of 19 February 2020, ref. no. I FSK 2243/19).
The case law also referred to the explanatory memorandum to the Act of 19 December 2008 amending the Act on Freedom of Economic Activity and certain other acts (Journal of Laws of 2009, item 97), which introduced changes to the time limits in the then-applicable Act on Freedom of Economic Activity(u.s.d.g.), Article 83 of which corresponds to the currently applicable Article 55 of the Public Procurement Law The legislator explicitly specified, by clarifying the wording of Article 83(1) of the u.s.d.g., the time limit for the duration of an inspection in working days, the extension of which must fall within the time limit set for the conduct of the inspection by the inspection authority for individual categories of entrepreneurs.
The Supreme Administrative Court, in its judgment of 21 September 2012, ref. no. I GSK 1042/11, indicated that the introduction of time limits for inspections was intended to effectively reduce the duration of inspections.
Furthermore, a view has emerged in case law that the limit on the number of audit days applies exclusively to consecutive working days (see the judgment of the Supreme Administrative Court of 19 February 2020, ref. no. I FSK 2243/19). Moreover, according to the position presented by the Ministry of Finance, a Saturday may also be considered a working day, provided that it is a working day at the premises of the entity being audited.
Thus, for the correct method of calculating the days of the audit, it is irrelevant whether the auditing authority carried out any activities or was unable to do so because the day in question is a non-working day for the auditing authority, since, within the limits referred to in Article 55 of the Tax Audit Act, consecutive days must always be counted. Any other approach is incorrect and constitutes a breach of the provisions of a guarantee nature, and thus gives rise to the possibility of raising relevant objections in relation to the inspection proceedings being conducted.
Frequently asked questions
How many working days may a tax audit last in one calendar year for a micro-entrepreneur?
For micro-entrepreneurs, the maximum duration of all audits in one calendar year is twelve working days. This is a statutory limit aimed at protecting entrepreneurs from unjustified prolongation of audit proceedings.
Can the tax authority extend an audit if it deems it necessary to prevent a crime?
Yes, the regulations provide for an exception where the time limit does not apply if the audit is necessary to prevent the commission of a crime or fiscal offense. Tax authorities often invoke this provision to waive notification of the intention to commence an audit and to not apply time limits.
On what basis and in what cases can the duration of a tax audit be extended?
Extension is possible for reasons beyond the control of the audit authority, which requires preparing and serving written justification to the audited party. Additionally, an audit may be extended if an understatement of tax liability exceeding the equivalent of ten percent of the declared amount is revealed, or an overstatement of loss exceeding half of the declared loss is discovered.
How are working days counted during a tax audit?
The day limit refers exclusively to consecutive working days, regardless of whether the tax authority performed any activities on a given day. Saturday may also be considered a working day, provided it is a working day at the audited entrepreneur’s establishment.
Do non-working days at the tax office count toward the audit duration limit?
Yes, within statutory limits, all consecutive working days must be counted, regardless of whether the audit authority had the opportunity to undertake activities on a given day. Different treatment is incorrect and constitutes a violation of provisions of a guarantee nature.
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The practice includes ongoing advice on administrative and tax law. He has extensive experience in handling judicial, administrative, tax and judicial-administrative proceedings concerning both individual clients and business entities, including that gained through many years of providing services to local government units and other units of the public finance sector.
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