Tax relief - you should know

Service-Tax

Entrepreneurs often face financial difficulties, which means that tax liabilities are not paid on time. The provisions of the tax ordinance contain regulations that allow to avoid the negative effects of such events. Check when tax credits are applied!

Tax relief

The tax authority at the request of the taxpayer may, subject to the provisions of article 4. 67b of the Tax Ordinance in cases justified by an important interest of the taxpayer or the public interest:

  • to postpone the tax payment date or

  • spread the tax payment into installments;

  • postpone the date of payment of tax arrears together with interest for late payment or interest specified in the decision referred to in article 1. 53a;

  • spread the payment of tax arrears in installments together with interest for late payment or interest specified in the decision referred to in art. 53a;

  • write off all or part of tax arrears, late payment interest or prolongation fee.

The regulations provide for two equal grounds for granting tax relief - it may be an important interest of the taxpayer or the public interest. These conditions are independent of each other, which means that only one of them is required to successfully resolve the taxpayer's application.

The definitions of the phrases "important taxpayer's interest" and "public interest" cannot be found in the law. The assessment of both of these premises for postponing the deadline by the tax authority should be objective, taking into account the principles of logic and life experience. It must be made according to criteria consistent with the universally approved hierarchy of values. In addition, it is subject to judicial review of legality, which results from the fact that these conditions are contained in a legal provision.

It is assumed that an important interest of the taxpayer is an extraordinary situation, a random event that could disturb the existence of the taxpayer.

In the judgment of the Supreme Administrative Court in Szczecin of April 22, 1999, file ref. act SA / Sz 850/98 it was indicated that the important interest of the taxpayer is, among others a situation where, due to extraordinary, random cases, the taxpayer is unable to settle the tax arrears. It will be a loss of earning potential, a random loss of property.

On the other hand, the public interest should be understood as the interest concerning the whole society or a part of it, usually all people remaining in mutual relations, resulting from similar living conditions, work, standards of conduct or place of residence.

A positive decision on relief in repayment or remission of liabilities may only be issued at the taxpayer's request.

Application for tax relief

The regulations do not specify what elements should be included in an application for relief in the payment of tax liabilities, so the general rules for submitting applications regulated in the Tax Ordinance should be applied here.

This means that the application should contain at least the content of the request, an indication of the entity it comes from, as well as the address of its seat or place of business. Tax offices usually define precise guidelines regarding the content of the application for relief in the payment of tax liabilities for entrepreneurs, so it is worth obtaining such information at the competent office.

However, this type of document should always contain:

  • identification data - name, surname (entrepreneur's name),

  • the address of the entrepreneur's registered office and NIP (tax identification number),

  • type of tax relief (e.g. payment of the tax in installments),

  • the type and amount of the liability to which the application relates (e.g. income tax, VAT),

  • justification of the application, including arguments confirming the important interest of the taxpayer or important public interest (along with documents supporting the arguments).

Tax reliefs - legal regulations

The provisions of the Act on proceedings in matters relating to state aid apply to the reliefs in the repayment of tax liabilities for companies, therefore the entrepreneur should specify the form of the requested state aid and submit, together with the application for granting aid, in the case of applying for aid:

  • de minimis - all certificates of granting this aid, which he received in the last three years preceding the date of submitting the application for granting aid,

  • other than de minimis aid - information about the received state aid, including in particular the date and legal basis for granting it, other forms and purpose, or information about not receiving aid.

It should be remembered that the aid cannot be granted until the entrepreneur provides the above-mentioned information or certificates.

In the case of an application for a tax relief in the form of a deferral or installment of tax, tax arrears with late payment interest, it should be remembered that the application should additionally contain a proposal to settle the liability, i.e. payment dates, number and amount of installments in which the applicant would like to settle due.

The submitted application, in addition to meeting the formal requirements, should also include an explanation why the taxpayer is unable to bear the tax burden within the statutory period. Adequate justification of the request is required. It should be remembered that the tax authority will only consider the application if it is justified by an important interest of the taxpayer or the public interest.

When the tax authority accepts the taxpayer's request, a new tax payment deadline appears. It is the date on which, in accordance with the decision, the payment of deferred tax or tax arrears together with interest for late payment or individual installments for which the tax or tax arrears have been allocated, together with interest for late payment.

Failure to meet the deferred deadline by the taxpayer results in the acceptance of the payment deadline prior to the decision to defer the deadline. If the taxpayer has failed to meet the deferred tax payment deadline (or tax arrears with interest), the consequence will be charging for the period from the issuance of the decision on deferral to the date of payment of default interest specified therein. Only the payment of the full amount of deferred tax (tax arrears) does not result in a change in the payment date resulting from the decision postponing the date of tax payment or tax arrears. It should be remembered that in the event of failure to meet the deadline for deferred tax payment or tax arrears, the decision on deferred tax payment or tax arrears expires by operation of law, together with interest for late payment. Therefore, the tax authority is not obliged to issue decisions confirming the expiry of the decisions granting the relief.