Alternative Methods for Resolving Tax Disputes in Poland – The Odds of Success

Abstract

In October 2015 the Polish government adopted the "Directional Assumptions of the New Tax Ordinance” drafted by the Committee for Codification of the General Tax Law – a body of experts appointed by the Prime Minister of the Republic of Poland. The Assumptions now serve the basis for drafting the new Tax Ordinance, to enter into force in 2018. The Assumptions propose to establish procedural grounds for consensual, i.e. premised on an agreement between parties to the dispute, forms of tax disputes prevention and resolution – ADR ex ante (consultative pre- and post-filing procedure; cooperative compliance program) and ex post (settlement procedure used once a dispute has arisen; third-party mediation). This part of the project, and quite revolutionary innovation in the Polish tax procedure it puts forward, have raised much concern among the tax administration, tax judges and academia. Serious doubts and reservations over the possibility to ‘negotiate taxes’ have been expressed both officially, i.e. within the consultation process, and in informal communication between external stakeholders and members of the Committee. The purpose of the paper is twofold. First, it seeks to explain the main policy problems the Committee had to solve while developing the proposal. Second, it purports to discuss normative objections that have been raised by stakeholders against the proposal and to pinpoint possible practical difficulties which can hamper its implementation and operation. The paper unfolds as follows. After providing the background information on the Committee’s work (in section 1) and on the current status of tax ADR in Poland (in section 2) the paper outlines the main policy dilemmas related to ADR that the Committee faced in the process of drafting the Assumptions and sets out the main elements of the resulting ADR proposal (in section 3). Then it briefly presents consultation process of the proposal and feedback received in this process (section 4). Sections 5 and 6 – the core of the paper – discuss normative and non-normative (factual) obstacles to the implementation and successful operation of the proposal. As a final point, in section 7 the paper sketches a "to do list": non-exhaustive catalogue of supporting activities which can aid the successful – effective, efficient and fair – implementation of the proposal. The author is the member of the Committee responsible for the ADR proposal.