Guide to Polish Tax Law Research

I.Constitutional and European Law

1.      Tax Legislation, Administration and Allocation of Revenue

According to Article 3 of the Constitution, Poland is a unitary state. It means that taxes are levied only by the legislative power on the basis of statute. The most important constitutional provisions on tax matters are: Article 84 and Section X (Art. 216 to 227) which is entitled "Public Finance". Among other provisions, this section contains rules on taxes levied in Poland.  According  to article 84 of the Polish Constitution, everyone shall comply with his responsibilities and public duties, including the payment of taxes, as specified by statue. This rule corresponds with Article 217 of the Constitution. That Article has a great importance for the allocation of right to impose taxes. Pursuant to Article 217 of the Constitution imposition of taxes, as well as other public imposts, the specification of those subject to tax, object of tax and rates, as well as principles for granting tax reliefs and exemptions along with categories of taxpayers, shall be by specified by statue. This means that only the legislative power is entitled to impose taxes and other public duties [1] . It must be noted that units of the local government have no competence to impose taxes. According to the Polish Constitution the territorial system of the State shall ensure the decentralization of public power and also public finances. In particular, units of local community participate in the  substantial part of public duties. There are three levels of territorial divisions in Poland: commune (gmina) - the basic level of local government-, district (powiat) and province (województwo)- the regional level of the local government. Since 1^st of January 1999 each of them is a self-governing community. Pursuant to the Article 167 of the Polish Constitution, the sources of revenues for units of local government shall be specified by statue. The rules governing the allocation of revenues among different levels of local government are contained in the Act from 13^th of November 2003 on Revenues of the Units of Local Government. Pursuant to this  Act, revenues from all taxes and other public duties are divided between the State and units of local government. It must be noticed that district (powiat) and province (województwo) participates only to certain percentage in revenues from personal income tax and corporate income tax (see Table 1 below). Also commune has shares in those taxes, but there are taxes constituting entirely source of  commune's revenues. Taking as the criterion the budget to which revenues from taxes come,  all taxes in Poland shall be divided into state taxes and local (commune) taxes. The State taxes are: personal income tax, corporate income tax, tax on goods and services (the Polish version of value added tax), excise duty and gambling and lottery tax. The local (commune) taxes are: real property tax, agricultural tax, forestry tax, inheritance and gifts tax, tax on civil law transactions, tax on means of transport, tax on possession of dogs and lump sum tax on income from individual's small business activity. It must be noticed that commune has the right to set the level of certain local taxes and charges to the extent established by the statue (i.e. real property tax, tax on means of transport, tax on possession of dogs; for details see chapter II Law and Regulations). Also the administration of taxes is divided between the State and a commune. It does not mean that a commune is competent to administer all taxes constituting source of its revenues. Some local (commune) taxes like: inheritance and gifts tax, tax on civil law transactions are administered by the state's tax authorities.

Table 1

Unit of local community	The level of participation in revenues from:
		Personal income tax	Corporate income tax
Commune (gmina)	39,34%	6,71%
District (powiat)	10,25%	1,40%
Province (województwo)	1,60%	15,90%

There is a wide variety of books that concern this topic. Starting point might be:

1.      B. Brzeziński, T. Dębowska - Romanowska, M. Kalinowski, W. Wójtowicz, Finanse publiczne. Wydanie 3.,Wydawnictwo C.H. Beck, Warszawa 1998.
2.      W. Nykiel, Ulgi i zwolnienia w konstrukcji prawnej podatku, Dom Wydawniczy ABC, Warszawa 2002.
3.      K. Koperkiewicz - Mordel, W. Nykiel, W. Chróścielewski, Polskie prawo podatkowe, Wydanictwo Difin, Warszawa 2003.
4.      Finanse publiczne i prawo finansowe, pod. red. C. Kosikowskiego i E. Ruśkowskiego, Dom Wydawniczy ABC, Warszawa 2003.

Currently, the text of the Polish Constitution in English is availible on the internet : www.sejm.gov.pl

2.      Other Constitutional Laws

Poland has a powerful constitutional court - the Constitutional Tribunal (Trybunał Konstytucyjny), which has many times adjudicated upon conformity of the tax regulations with the Constitution. Pursuant to the Article 189 of the Constitution, the judgments of the Constitutional Tribunal are final and of universally binding application. It is possible to challenge the constitutionality of the entire statute or individual provisions therein. The Constitution indicates five areas within the jurisdiction of the  Constitutional Tribunal:

1.      conformity of statutes and international agreements with the Constitution;
2.      conformity of a statute with ratified international agreements whose ratification required prior consent granted by statute;
3.      conformity of legal provisions issued by central State organs with the Constitution, ratified international agreements and statutes;
4.      conformity with the Constitution of the purposes or activities of political parties;
5.      complaints concerning constitutional infringements, as specified in Article 79 § 1 of the Constitution.

These areas of  Tribunal's jurisdiction cannot be expanded by way of ordinary statutes. The most important judgements of the Constitutional Tribunal on tax matters in recent years are: the judgement of 11th of May 2004 concerning the case of an individual information issued by the tax authorities in the taxpayer's individual cases, the judgement of 11^th  of May 2004 in the case of abuse of law clause art. 24b § 1 introduced into  General Tax Law in 2003 (K7/03),  the judgement of  20^th  of November 2002 "tax amnesty" and "proprietary declarations"   (K41/02), the judgement of 16^th  of April 2002 in the case of payment of tax liabilities as a condition for disposal of inherited property (SK 23/01). In all those cases The Tribunal found tax regulations incompatible with the Polish Constitution.

Judgments of the Constitutional Tribunal regarding matters specified above, must be immediately published in the official journal in which the original normative act was promulgated. If a normative act has not been promulgated, then the judgment shall be published in the Official Gazette of the Republic of Poland, Monitor Polski. Currently the summaries of these juridical decisions of the Constitutional Tribunal are available on the internet: www.trybunal.gov.pl They are however unofficial. They do not contain literal quotations. Only the full versions of the Tribunal's judicial decisions in Polish are of an official character. They are published, including the reasoning and any diverging opinions, in the official collection "Orzecznictwo Trybunału Konstytucyjnego. Zbiór Urzędowy" and on the Tribunal's web site. 

3. European Law

Poland became a member of the European Union on the 1^st  of May 2004. During the process of preparation to the accession, Poland  was obliged to implement the European Council Directives on tax matters into its domestic tax law. This obligation stems from the Association Treaty which was signed by Poland in 1991. Since then Polish tax law is under the increasing influence of the European tax law.  It must be noted that if an agreement, ratified by the Republic of Poland, establishing an international organisation so provides, the laws established by it shall be applied directly and have precedence in the event of a conflict of laws.

The VAT has been harmonised by several directives. The most important of these is the 6^th directive of 1977. The new Tax on Goods and Services Act and Excise Duty Act came into force on 1^st May 2004 and implemented the EU Council directives into Polish domestic regulations covering those taxes. The process of implementation of the Parent/ Subsidiary and Merger Directive of 1990 is completed. Poland introduced the participation exemption provided in the PS directive into the Corporate Income Tax Act.  The interpretation of these directives falls within the jurisdiction of the European Court of Justice. The rulings of the European Court of Justice, in particular on the fundamental freedoms, have started to influence direct taxation as well.

Starting points for research:

1. K. Koperkiewicz-Mordel, W. Nykiel., Wojciech Chróścielewski, Polskie prawo podatkowe, Wydawnictwo Difin, Warszawa 2003.
2. H. Litwińczuk, Prawo podatkowe przedsiębiorców, Dom Wydawniczy ABC, Warszawa 2003.

II.   International Tax Law, Treaties

1. General remarks

Unilateral domestic provisions on international cases are contained in the Personal Income Tax Act (in particular Art. 3 and 27) and the Corporate Income Tax Act (in particular Art. 3 and  20, 22). These provisions cover rules governing the tax liability of residents (unlimited tax liability) and the tax liability of non-resident taxpayers (limited tax liability, the source taxation principle) and the methods for elimination of both international double taxation and economic double taxation.

2. Treaties

In Poland, tax treaties have the same status as laws. Pursuant to Chapter III "Sources of Law" of the Polish Constitution, the sources of universally binding law are:   the Constitution, statutes, ratified international agreements, and regulations. International agreements ratified with prior consent granted by statute are promulgated in accordance with the procedures required for statutes. After promulgation thereof in the Journal of Laws of the Republic of Poland (Dziennik Ustaw), a ratified international agreement constitutes part of the domestic legal order and is applied directly, unless its application depends on the enactment of a statute.

An international agreement ratified upon prior consent granted by statute shall have precedence over statutes if such an agreement cannot be reconciled with the provisions of such statutes. Poland has concluded more than 80 double taxation agreements (including agreements with all European Members States). All of them are based on the OECD Model Convention. Poland is not a party of any multilateral double taxation agreement.  To see the Treaty Chart, look in: European Tax Handbook, IBFD, Amsterdam 2003, page 475-476:

Literature:

1.      J. Banach, Polskie umowy w sprawie unikania podwójnego opodatkowania, Wyd. 2,Wydawnictwo C.H Beck, Warszawa 2002.
2.     European Tax Handbook, International Bureau of Fiscal Documentation, Amsterdam 2004.

II.  Laws and Regulations

1. Ordynacja podatkowa (General Tax  Law)

This act covers two main areas: tax liability and tax procedure. It  formulates some general principles of tax system and definitions applicable in the whole tax law, such as: tax liabilities, expiry of tax liabilities, third persons responsibility, universal succession in tax law.

Selected commentary book:

B. Brzezinski, M. Kalinowski, M. Masternak, A. Olesinska, Ordynacja podatkowa. Komentarz., Wydawnictwo Towarzystwo Naukowe Organizacji Kierownictwa "Dom Organizatora" Toruń 2002.

2. Prawo o postępowaniu przed sądami administracyjnymi (Administrative Courts Procedure Law).

This act contains  special regulation about legal procedure for administrative courts. (see chapter Case Law).

3. Podatek dochodowy od osób prawnych (Corporate Income Tax).

Tax imposed on income of companies (legal entities). Tax is levied on a flat rate basis of 19%.

4. Podatek dochodowy od osób fizycznych (Personal Income tax).

Tax imposed on income of individuals. This is direct tax imposed on annual basis. This is progressive income tax of three rates 19%, 30%, 40%. But income tax from individual enterprises and partners of partnership, on some conditions and at request, is levied on a flat rate basis of 19%.

Selected commentary book:

W. Nykiel, K. Koperkiewicz-Mordel, Podatek dochodowy od osób fizycznych. Kometarz. Wdawnictwo Prawnicze Lexis Nexis, Warszawa 2003.

5. Podatek od towarow i uslug (Tax on goods and services - Polish Value Added Tax).

Tax imposed on final consumption (supply of goods and services). Polish VAT is harmonized with European Law. (see chapter European Law). Basic rate is 22%, and reduced rates are 7% and 0%.

Selected commentary book:

T. Michalik,VAT. Komentarz, Wydawnictwo C,H. Beck, Warszawa 2004.

6. Podatek akcyzowy (Excise duties).

This tax is levied on alcohol, tobacco, mineral oils and to this extent it is harmonized with the EU law, but it is also imposed on other products, such as expensive or very old cars, yachts, matches.

7. Podatek od gier (Gambling and Lottery tax).

Tax imposed on sale of lots by the organizer of the lottery or games. This is a kind of turnover tax.

8. Podatek od czynności cywilnoprawnych (Tax on Civil Law Transactions).

This tax is levied on civil law actions, such as: sale, change, loans, mortgage, articles of associations. The tax is imposed on non-professional actions, as a rule not between taxpayers of VAT. 

Selected commentary book:

A. Marianski, D. Strzelec, Komentarz do ustawy o podatku od czynności cywilnoprawnych oraz ustawy o opłacie skarbowej, Wydawnictwo ODDK, Gdańsk 2004.

9. Podatek od spadków i darowizn (Inheritance and Gift Tax).

Inheritance tax is connected with heritage. The tax is imposed on the transfer of property. It is levied on the value of the estate obtained.

Gift tax concerns transfer of property "inter vivos". The tax is levied on the value of the estate subject to transfer.

Inheritance and Gift Tax  constitutes revenue of local communities, but is administered by state tax authorities.

10.  Taxes levied on the Real Property

Three kinds of this tax exist in Poland. Immovable property tax is levied on the value or surface of the immovable property, which isn't subject to agriculture or forest tax. Agricultural land tax is levied on the surface of agricultural land. Forest land tax is levied on the surface of wood land. These taxes are revenues of commune. Administration of these taxes is assigned also to local tax authorities.

Selected commentary book:

L. Etel, Podatek od nieruchomosci. Komentarz., Wydawnictwo C.H. Beck, Warszawa 2002.

11. Podatek od środków transportu (Tax on Means of Transport).

Tax is levied on the possession of motor vehicles. This tax is local (commune). Administration of this tax also belongs to local authorities.

12. Podatek od posiadania psow (Tax on possession of dogs).

Tax is levied on the possession of dogs. This tax is revenue of commune. Administration of this tax is assigned to local authorities as well.

13. Opłata miejscowa (Tourist duty).

Tax is levied on all categories of individuals arriving to spa. This tax is levied as a sum per head for every day of staying in health-resorts. This duty  is local and constitutes revenue of commune.

14. Opłata targowa (Market duty).

Duty is levied upon selling some products in special markets. Duty is levied each day of selling. This duty  is local and is revenue of commune.

15. Opłata skarbowa (Stamp duties).

Duty levied upon the issue of official documents such as cheques and petitions to state and local authorities. This is revenue of commune.

III. Ministerial Interpretations and Tax Authority Rulings

According to Article 14 § 1 of the General Tax Law the Minister of Finance, who provides the general supervision over tax cases, should aim at ensuring the unified application of law by the tax authorities and the fiscal control authorities. One of the tools to achieve this goal is the official interpretation of the tax law taking into account the case law of the courts and of the Constitutional Tribunal. Such interpretations are published in the Official Journal of the Minister of Finance.

The interpretations of tax law issued by the Minister of Finance are general in their character. Therefore, a given taxpayer cannot obtain from the Minister of Finance an interpretation concerning his individual case. A taxpayer (withholder, tax collector) can instead turn to the competent first-instance tax authority with a written request and that tax authority is obliged to provide written information about the scope of  application of provisions of tax law in his individual case in which tax proceedings ( fiscal control, proceedings at an administrative court) have not been commenced. When submitting the request a taxpayer (withholder, tax collector) is obliged to present comprehensively the factual state and his own opinion in the case.

Literature:

B. Brzezinski, M. Kalinowski, M. Masternak, A. Olesinska, Ordynacja podatkowa. Komentarz., Wydawnictwo Towarzystwo Naukowe Organizacji Kierownictwa "Dom Organizatora" Toruń 2002..

IV. Case Law

Administrative cases, especially tax cases, are heard by special administrative courts. There have been two levels of administrative courts in Poland since 2004. First level is region court. Against the judgment of this court a taxpayer can appeal to the Supreme Administrative Court (Naczelny Sąd Administracyjny).
Judgments of administrative courts are available in official publications (Orzecznictwo Naczelnego Sądu Administracyjnego - ONSA) and in several periodicals, especially Przegląd Orzecznictwa Podatkowego (Tax jurisdiction review).

See: http://www.nsa.gov.pl

V. Periodicals

In Poland there are several tax journals. The most important are:

Kwartalnik Prawa Podatkowego - Tax Law Quarterly (quarterly publication with English summary about articles), published by Center of Tax Documentation and Studies University of Lodz (Centrum Dokumentacji i Studiow Podatkowych Uniwersytetu Łódziego).

See: http://cdisp.uni.lodz.pl

Monitor Podatkowy - Tax Monitor, published by C.H.Beck, Warsaw,

See: http://www.monitorpodatkowy.pl

Przeglad Podatkowy - Tax Review, published by KiK, Warsaw, See: http://www.kik.com.pl

VI. Books

1. J. Banach , Polskie umowy w sprawie unikania podwójnego opodatkowania, Wyd. 2,Wydawnictwo C.H Beck, Warszawa 2002.
2. B. Brzezinski, M. Kalinowski, M. Masternak, A. Olesinska, Ordynacja podatkowa. Komentarz., Wydawnictwo Towarzystwo Naukowe Organizacji Kierownictwa "Dom Organizatora" Toruń 2002..
3. B. Brzeziński, W. Nykiel, Regulation of Ministerial Interpretations and Tax Authority Rulings Amended, Ruropean Taxation, 7-8/ 2003
4. B. Brzeziński, T. Dębowska - Romanowska, M. Kalinowski, W. Wójtowicz, Finanse publiczne. Wydanie 3.,Wydawnictwo C.H. Beck, Warszawa 1998.
5. B. Brzeziński, Wstęp do nauki prawa podatkowego, Wydawnictwo TNOiK, Toruń 2001
6. L. Etel, Podatek od nieruchomości. Komentarz., Wydawnictwo C.H. Beck, Warszawa 2002.
7. European Tax Handbook, International Bureau of Fiscal Documentation, Amsterdam 2004.
8. J. Głuchowski, Polskie prawo podatkowe, Wydawnictwo Prawnicze Lexis Nexis, Warszawa 2004
9. A. Gomułowicz, Małecki J., Podatki i prawo podatkowe, Wydawnictwo Prawnicze Lexis Nexis, Warszawa 2002
10. K. Koperkiewicz - Mordel, W. Nykiel, W. Chróścielewski, Polskie prawo podatkowe, Wydanictwo Difin, Warszawa 2003,
11. Finanse publiczne i prawo finansowe, pod. red. C. Kosikowskiego i E. Ruśkowskiego, Dom Wydawniczy ABC, Warszawa 2003
12. R. Mastalski, Prawo podatkowe, Wydawnictwo Beck, Warszawa 2002
13. T. Michalik, VAT. Komentarz, C,H. Beck, Warszawa 2004.
14. W. Nykiel, K. Koperkiewicz-Mordel, Podatek dochodowy od osób fizycznych. Kometarz. Wdawnictwo Prawnicze Lexis Nexis, Warszawa 2003.
15. W. Nykiel, Ulgi i zwolnienia w konstrukcji prawnej podatku, Dom Wydawniczy ABC, Warszawa 2002
16. Ordynacja podatkowa, Act on Rules for Taxation, Dom Wydawniczy ABC, Warszawa 2002
17. P. Smoleń, M. Szustek-Janowska, W. Wójtowicz, Prawo podatkowe, Oficyna Wydawbnicza Branta, Bydgoszcz - Lublin 2002

Tax legislation in Polish is available for free on the internet:  

www.sejm.gov.pl www.nsa.gov.pl www.trybunal.gov.pl www.mf.gov.pl

Authors: Ziemowit Kukulski, Adam Marianski.

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