In the case of taxpayers seeking an individual tax ruling, they are sent requests asking them to specify the PKWiU classification, failing which the application will not be considered. In the above proceedings, one can see an analogy with situations in which the Director of the National Tax Information Service leaves applications for an IP Box interpretation unconsidered due to the failure to provide a clear answer regarding the legal classification of the activity as research and development. The authority’s reasoning is analogous, as it indicates that certain provisions do not fall within the scope of tax law, and therefore the authority is unable to assess them. Similarly, with regard to the PKWiU, the authority’s justification for such a decision is based on the assumption that the PKWiU is solely a classification used for the purposes of public statistics, does not constitute tax regulations, and is therefore not subject to the authority’s assessment. Crucially, if in such a situation the taxpayer specifies a particular classification, the authority does not assess its correctness, as the facts set out in the application are not subject to assessment. The protective effect of such an interpretation is therefore highly debatable in this respect.
However, a distinction must be made here between a situation where the assessment of the query forming the subject of the application for an interpretation does not require the specification of a PKWiU code at all. This occurs when the provisions of the tax law do not in any way refer to or make the application of specific solutions contingent upon any reference to the PKWiU. In such a situation, a request to the authority to indicate the relevant PKWiU classification is unfounded and constitutes a breach of the law.
Conversely, in a situation where a provision of the Act makes the occurrence of specific tax consequences contingent upon falling within the scope of a specific PKWiU classification, e.g. the application of a specific tax rate or a tax exemption, then the tax-law assessment of the classification under the PKWiU may be the subject of the applicant’s enquiry, and the task of carrying out such a tax-law assessment then falls within the competence of the interpreting authority. As the Supreme Administrative Court (NSA) noted in one of its rulings: “The phrases ‘the existing factual situation’ or ‘future event’ used in Article 14b(3) of the Tax Ordinance should be understood as an exhaustive presentation by the applicant of a given event, fact or activity which is of material significance for the assessment of the applicability of tax law. A distinction must be made between the presentation of these events, facts or actions and their legal classification. Such classification (assessment) also includes their categorisation under the Polish Classification of Economic Activities (PKWiU). Therefore, the position presented in the contested decision and subsequently repeated in the appeal in cassation, that such classification should be presented in the application for an individual interpretation not as the applicant’s own position, but solely in the description of the existing factual situation or future event, is not justified.” (judgment of the Supreme Administrative Court of 21 October 2020, ref. no. I FSK 150/18 – this judgment concerned VAT). Similarly, in the judgment of the Supreme Administrative Court of 3 June 2022, ref. no. II FSK 2735/19, which concerned CIT.
Despite the above-mentioned rulings, which are favourable to taxpayers, we will no doubt encounter, on more than one occasion, proceedings by the authorities that will shift the burden of determining the classification onto the very entities seeking protection through an individual interpretation.
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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