Refund of overpayment without interest - is the tax authority entitled to do so?

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Entrepreneurs running a business are required to pay taxes - income tax and, in the case of active VAT payers, additionally value added tax (commonly known as VAT) or other taxes, e.g. on real estate. Therefore, it often happens that the taxpayer overpays the tax to the tax office. As a result, he can claim a tax refund by submitting a proper application. Sometimes tax offices extend the refund of tax overpayment, but do they have such a right and should the tax authority add default interest to the refund?

How to apply for a tax refund?

Many payers or collectors may have the excess tax collected in the tax office. The legislator in Art. 72 § 1 of the Tax Ordinance indicates that the excess tax should be understood, inter alia, overpaid or independently paid tax, tax collected independently (e.g. in the event of an event as a result of which the tax was paid and this event should not be taxed) or in the amount higher than the amount due.

In summary, due to the fact that taxpayers are obliged to pay taxes only in the amount resulting from the declaration or calculation of the tax liability (in accordance with applicable regulations), when they pay an amount higher than it should, they can then apply for a refund of the overpayment tax. If the taxpayer does not submit an application for overpayment, it will first be transferred towards tax arrears or future liabilities due to a given tax. A taxpayer who has overpaid income tax or VAT, in order to obtain a refund, should submit an application for a tax overpayment to the competent tax office.

No provisions explicitly specify what the application should look like, however, it has been agreed that it should contain the following elements:

  • applicant's data:
    • name and surname or name of the taxpayer (payer or collector),

    • address of residence or registered office,

    • PESEL number or NIP number;

  • details of the tax authority to which the application is addressed (the competent head of the tax office);
  • specification of the type of tax and the settlement period in which the overpayment occurs;
  • determination of the amount of the overpayment;
  • exhaustively presented facts justifying the submitted application.

If the tax overpayment results from the submitted correction of the tax return or the annual tax return, the application should be submitted together with the correction. In addition, the taxpayer should bear in mind that the right to submit an application for overpayment expires after the expiry of the limitation period for the tax liability, i.e. after 5 years, counting from the end of the calendar year in which the tax payment deadline expired. Submitting an application to the tax office for overpayment is free of charge.

When is the tax overpayment refunded?

Tax overpayment shall be returned within the time limit specified in art. 77 § 1 of the Tax Ordinance. At the same time, it should be borne in mind that these deadlines vary depending on the type of tax with which the overpayment arose and the circumstances of its creation.

For example, the tax authority is obliged to return the overpayment within:

  • 30 days from the date of issuing a new decision - if the overpayment arose in connection with the revocation or declaration of invalidity of the decision;
  • 30 days from the date of the decision stating the overpayment or determining the amount of the overpayment;
  • 30 days from the date of the decision to amend, revoke or annul the decision - if, due to the revocation or annulment of the decision, there is no obligation to issue a new decision;
  • 3 months from the date of submitting the tax return (e.g. PIT-28, PIT-37, PIT-36, PIT-36L forms) or the declaration. If the taxpayer uses the e-PIT service (currently available only for PIT-37 annual tax returns), he will be subject to a shorter period for the refund of the tax overpayment, which will be 45 days. The refund of overpayment of VAT may be made to the bank account indicated in the case of natural persons on the CEIDG-1 form or, if the taxpayer does not have it, in cash. At the same time, it should be borne in mind that if the tax overpayment is refunded in cash by means of a postal order, the office has the right to reduce the value of the overpayment by the postage costs incurred. In a special case, i.e. when the overpayment, the amount of which does not exceed twice the cost of the reminder in enforcement proceedings, if the account to be returned is not indicated, is returned at the cash desk.

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Extending the decision and returning tax overpayment without interest

The tax overpayment should be refunded by the tax authority in a timely manner depending on the circumstances in which the overpayment arose. In a situation where the tax authority does not make a refund within the time limit specified in the provisions of the Tax Ordinance, the taxpayer will be entitled to interest on the value of the overpayment in the amount equal to the amount of interest for late payment, collected on tax arrears. In 2019, the value of the reduced interest on tax arrears is 8%. It is worth mentioning here that overpayments, the amount of which does not exceed twice the cost of a reminder in enforcement proceedings, is not subject to the above-mentioned interest rate. Art. 78 § 3 of the Tax Ordinance:
"Interest is due to:
1) in the cases provided for in Art. 77 § 1 paragraphs 1 and 3 - from the date of the overpayment, and if the tax authority has not contributed to the creation of the premises for the amendment or repeal of the decision, and the overpayment has not been returned within - from the date of the decision to amend or revoke the decision;
3) in the cases provided for in Art. 77 § 1 point 2 and point 6 - from the date of submission of the application for a declaration of overpayment along with the corrected tax return (declaration):
a) if the overpayment has not been refunded within 30 days from the date of the decision stating the overpayment,
b) if the decision finding the overpayment was not issued within 2 months from the date of submitting the application for overpayment, unless the delay in issuing the decision was contributed by a taxpayer, payer or collector,
c) if the overpayment has not been returned within the time limit referred to in Art. 77 § 1, paragraph 6, unless the delay in the return of the overpayment contributed to the taxpayer, payer or collector;
4) in the case provided for in Art. 77 § 1 point 5 and § 2 points 2 and 3 - from the date of the overpayment, if the overpayment has not been reimbursed within 3 months from the date of submission of the testimony or declaration referred to in article 1. 73 § 2 points 1-3, or from the date of correcting the testimony or declaration pursuant to art. 274 or article. 274a,
4a) in the cases provided for in Art. 77 § 1 point 5a and § 2 point 1 - from the date of the overpayment, if the overpayment has not been returned within 45 days from the date of submission of the tax return referred to in Art. 73 § 2 point 1, or from the date of correcting the testimony pursuant to art. 274 or article. 274a. " Although in most cases, the late tax overpayment refund is subject to interest, the tax authorities in practice refund the overpayment (after 2 months), but without interest (which the taxpayer is in fact entitled to). This is due to the fact that if the tax office issues a decision just before the expiry of the limitation period (i.e. the tax authority has, as a rule, 5 years to issue a decision in which it will determine the amount of tax), it may refund the overpayment without interest. Although this is acting to the detriment of the taxpayer, it does not violate the regulations currently in force in Poland.

Nevertheless, in order to defend against such an action of the tax office, taxpayers may first appeal to the tax office to the national court and then, when national courts find the judgment to the detriment of the taxpayer, report, in principle, for the violation of EU law to the Court of Justice of the EU (i.e. the CJEU). .

The position regarding the lack of obligation to pay interest together with the tax refund of overpayment by the tax authority was recently presented in the judgment of the Supreme Administrative Court of May 9, 2017, file ref. II FSK 971/15. A similar ruling was issued on June 22, 2016 (file reference number I GSK 1821/14) and the Voivodship Administrative Court in Lublin of February 8, 2017 (file reference number I SA / Lu 879/16, not final).

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