Service-Tax

Tax relief

The primary goal of a business is to generate profit. Unfortunately, it happens that a company has financial problems as a result of many unfavorable circumstances. The machine moves, and the problem drives another problem. There is a problem with paying taxes on time, and in this case, even one day of delay causes tax arrears, which may result in interest and tax penal consequences. Is there a way to get rid of or at least minimize the problem in line with the tax authorities? It turns out that in some cases, yes. Well, tax regulations provide for reliefs in the payment of tax liabilities.

Tax relief - types

The tax authority, in cases justified by the important interest of the taxpayer or the public interest, may, at the taxpayer's request:

to postpone the tax payment date or to spread the tax payment into installments,
to postpone or installments the payment of tax arrears together with interest for late payment or interest resulting from the decision specifying their amount as at the date of submitting the tax return for the tax year or another tax period (or interest on the last day of submitting the tax return, if the tax return is not submitted on time),
write off all or part of tax arrears, late payment interest or prolongation fee.

Attention!

The cancellation of tax arrears also causes the cancellation of late payment interest in full or in the part in which the tax arrears were canceled.

Scope of obligations subject to relief

Tax reliefs for entrepreneurs may be granted when:

do not constitute state aid,
constitute de minimis aid - to the extent and on the terms specified in the directly applicable Community legislation relating to aid under the de minimis rule,
constitute state aid:

granted to redress damage caused by natural disasters or other extraordinary events,

granted in order to prevent or eliminate serious disturbances in the economy of a cross-sectoral nature,

provided to support domestic entrepreneurs operating under an economic undertaking undertaken in the European interest,

awarded to promote and support culture, national heritage, science and education,

being compensation for the provision of services of general economic interest entrusted on the basis of separate provisions,

provided for training, employment, development of small and medium-sized enterprises, restructuring, environmental protection, research and development works,

regional,

granted for other purposes specified pursuant to § 6 by the Council of Ministers.

Conditions for granting tax relief

Chapter 7a of the Tax Ordinance Act provides for a tax relief. However, the use of this form of state aid is possible only in exceptional circumstances, and their application depends on the tax authority. In the application submitted to the tax authority, the entrepreneur includes all the evidence that the tax relief was granted. However, the submission of an application itself does not guarantee that you will receive assistance. It is worth remembering that due to the discretionary nature of the tax relief, the tax authority may, but does not have to, write off tax liabilities, even in the event of presenting an important interest of the taxpayer.

Bad financial condition of the company and tax reliefs

Granting tax reliefs to entrepreneurs is possible only in strictly defined situations, resulting from the European Community legislation in force in Poland and Polish legal regulations. Administrative courts assume that the entrepreneur's financial problems are not a sufficient reason to write off his tax arrears. According to the courts, the company's temporary problems and generating lower income are not synonymous with the inability to settle tax liabilities. Therefore, problems with financial liquidity do not constitute an automatic basis for recognizing a tax relief. Therefore, in the argumentation of his application, the entrepreneur should not refer to the crisis on the market or the breakdown in the industry - according to the position of the tax authorities, such situations are included in the risk of running a business and do not belong to the so-called exceptional situations.

Tax relief - exceptional situations

An argument to write off tax liabilities may be, for example, a serious illness, fire in the place of residence or unemployment of the taxpayer, if he has no sources of income. The group of exceptional situations also includes situations where a deterioration of the financial condition, not attributable to the taxpayer, could lead to the inability to cover the necessary expenses for the maintenance of the family. According to the judgment of the Supreme Administrative Court of April 22, 1999: (...)an important interest of the taxpayer is a situation where, due to extraordinary, random cases, the taxpayer is unable to settle tax arrears. It will be a loss of earning potential, a random loss of property.

Application for tax relief

The law does not regulate the exact form of an application for tax relief. However, a correctly prepared application should contain:

name and surname or name of the applicant
address (you can also include a phone number)
tax identification number (NIP)
signature
content of the request specifying:

type and amount of tax or tax arrears,
the reference period it relates to and
any arguments proving the correctness of the submitted application.

What to attach to the application for tax relief?

Taxpayers not conducting business activity:

asset declaration,

declaration on real estate and property rights that may be the subject of a compulsory mortgage and movable and transferable property rights that may be the subject of a fiscal lien (ORD-HZ),
documents confirming the justification of the application.

Taxpayers running a business:

asset declaration,
declaration on real estate and property rights that may be the subject of a compulsory mortgage and movable and transferable property rights that may be the subject of a fiscal lien (ORD-HZ),
documents confirming the justification of the application,
all de minimis aid certificates received by the entrepreneur in the year in which the entrepreneur is applying for aid and in the 2 preceding years, or a declaration on the amount of de minimis aid received during this period, or a declaration of not receiving such aid in this period;
the form of information provided when applying for de minimis aid,
a form for information to be submitted when applying for assistance.

Consideration of the application for relief in the repayment of liabilities

After the taxpayer submits an application for relief in the repayment of liabilities, the tax authority conducts an in-depth research - focusing not only on the company's financial situation. He may also be interested in the health of the taxpayer and his family. The entrepreneur should therefore be prepared for the need to submit additional evidence, such as prescriptions or statements from doctors.

It is worth knowing that the decision rejecting the application for tax relief is not final. Therefore, the taxpayer has the right to apply for a tax relief as long as the liability exists.