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Sudden treacherous changes in tax interpretations returning and taxes being calculated 5 years back? Is the Constitution of Business really in force?

Warsaw, 7th May 2019


Sudden treacherous changes in tax interpretations returning and taxes being calculated 5 years back?
Is the Constitution of Business really in force?


Entrepreneurs from the HoReCa industry are experiencing problems that according to the government should not exist. Their non-existence was supposed to be guaranteed by the Constitution for Business and its provisions saying that “law is not retroactive”, as well as by the so-called “principle of legal certainty”. The problems concern VAT rates applied before 2016. That year, the Minister of Finance issued a general interpretation, according to which the sale of ready-to-eat dishes should be taxed at the appropriate for restaurant services rate of 8%, not 5% appropriate for delivery of ready meals and meals.

“When I was starting my own company, I looked at the website of the Ministry of Finance where one could find over 200 individual interpretations saying the appropriate VAT rate for the sale of ready meals was 5% and so I used this rate” says one of the victims, Natalia Urban-Pałka, McDonald’s franchisee. “Everyone used this rate. Now we have to pay taxes with interest for 5 years back.”

“We have long indicated that VAT is the public levy that causes the most difficulties, even in terms of rates. It is absurd that a tax rate is attributed almost on an individual basis to a particular spice or vegetable. This problem is being partially solved by the new tax matrix, which is why we are supporting the direction in which this tax simplification is going,” comments Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers.

A high percentage of entrepreneurs from the HoReCa industry applied the 5% tax rate before 2016. Quite often, this entitlement was supported by individual tax interpretations. After the Ministry issued a general interpretation presenting a different position, these companies almost immediately began making use of the higher 8% rate. Unfortunately, Polish tax authorities initiated proceedings in which they started to undermine tax declarations submitted in periods preceding the issuance of an individual interpretation.

“A colossal problem arose,” claims Jakub Bińkowski, secretary at the Union’s Department of Law and Legislation. “The Ministry stated unequivocally that its intention was that the new rate should be applied to ‘future operations’, that is, from the moment the general interpretation was issued. However, tax authorities have individually decided to question earlier settlements, concerning periods when the 5% tax rate was widely used, since it had been confirmed by individual interpretations. I find it hard to call this any other way that a trap set for taxpayers.”

The Union’s experts emphasise that the proceedings are not only against the declared intentions of the Ministry of Finance, but also against the provisions of the Constitution, and almost directly against the principle of legal certainty from the Constitution for Business that came into force almost a year ago.

”The methods used by Jacek Kapica (former undersecretary at the Ministry of Finance in the years 2008-2015) are coming back with a bang. The tactics of changing the interpretations without amending the law, and then calculating tax surcharges for five years, were a nightmare in previous years,” stresses Cezary Kaźmierczak. “Simultaneously for some time now, we have observed that the tax authorities use this method less frequently, the Constitution for Business entered into force as well. It turns out that this is still not enough and entrepreneurs cannot feel safe, even if they adhere to the obtained interpretation.”

Two franchisees from the HoReCa industry participated in the press conference that took place at the seat of the Union of Entrepreneurs and Employers, who presented specific risks resulting from prolonged disputes with the tax authorities. They briefly described the business activity they run, as well as the sequence of events leading to the fact that they are currently facing the necessity to pay surcharge with interest, in spite of the fact that they acted in accordance with the interpretations of tax law in force at the time.

Kaźmierczak appealed to the government that they respect their very own promises made on numerous occasions that such round-ups belonged in the past and that they adhere to acts they themselves enacted.


07.05.2019 Report of the Union of Entrepreneurs and Employers: Ambiguously regulated VAT rates and the principle of legal certainty


Fot. NickyPe /

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