Julita Karaś-Gasparska: Tax Interpretations May Get an Expiration Date

Individual tax interpretations have long served businesses and private individuals as a protective shield. Under the current system, the interpretation issued by the director of the National Tax Information confirms whether a taxpayer's position is correct.

If a taxpayer describes an existing situation or a planned transaction in an application and follows the interpretation received, the tax authority cannot later challenge the taxpayer's settlement and impose a penalty as a result.

That protection is currently open-ended. It can end if the legislation on which the interpretation rests changes, or if the interpretation is changed or revoked by the head of the National Revenue Administration.

The Finance Ministry is now planning to change that system by limiting the protection resulting from an individual interpretation to five years. The proposal would alter a safeguard that taxpayers have been able to rely on without a fixed expiry date.