Generally, taxes expire five years after the end of the year in which the payment deadline passed. This means that if the personal income tax payment deadline for 2023 expired on April 30, 2024, it will expire on January 1, 2030. "Generally," because there are a number of events that suspend or interrupt the limitation period, meaning the deadline starts over.
A parliamentary bill amending the Tax Ordinance Act and the Fiscal Penal Code proposes a modification to this rule. Under the bill, the basic statute of limitations would be shortened from five to three years. Therefore, income tax for 2023 will expire on January 1, 2028, instead of January 1, 2030. However, the five-year statute of limitations will remain in place for tax liabilities exceeding PLN 1,000,000. Furthermore, the bill also introduces a ten-year statute of limitations for tax liabilities arising from fraud that served as the basis for a final conviction, as well as for the imposition of additional tax liabilities and abuse of VAT law.
According to the draft, the reason for suspending the limitation period will not be every initiation of fiscal penal proceedings, but only in cases in which a ten-year limitation period is provided and in VAT cases with an amount exceeding PLN 1,000,000.
The proposed solution is intended to eliminate legal uncertainty in situations where the tax authorities fail to exercise their right to tax receivables. It will also force officials to act more quickly, as the time to issue tax decisions will be shortened. It will also extend the time for recovering receivables from tax fraudsters. Furthermore, modifying the grounds for suspending the limitation period should largely eliminate the problem of instrumentally initiating tax criminal proceedings to suspend the limitation period, which has for years led to tax decisions being overturned by administrative courts.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of July 5, 2024
author/editor of the series:
