Success in a several-year-lasting dispute regarding the interruption of the tax liability limitation period!
On 3 June 2019, the Supreme Administrative Court, sitting in a panel of 7 judges, adopted a resolution (II FPS 1/19), in which it stated that in the legal status effective until 31 December 2015, the declaration of bankruptcy did not interrupt the limitation period of the tax liability whose payment date elapsed in the year in which the bankruptcy was declared. The legal issue constituting the subject of the resolution arose from the factual situation in which there was doubt whether the declaration of bankruptcy in August 2007 interrupted the limitation period of the liability for corporate income tax for 2006. According to the Supreme Administrative Court, it is undisputable that the limitation period must run so that it can be interrupted. The essence of the problem boiled down to the question of when the limitation period began to run. Is it when the payment was due or only at the end of the year in which the payment deadline for the tax liability expired? Doubts were raised by Article 70 paragraph 1 of the Tax Code, which does not directly provide when the limitation period begins. In the opinion of the Court, the content of Article 70 paragraph 1 of the Tax Code in connection with the provisions of Article 12 of the Tax Code specifying rules for the calculation of the time limitation can make it clear, through linguistic interpretation, that the limitation period begins at the end of the year in which the tax payment deadline expired. In the circumstances of the case, this means that the tax liability in respect of which the proceedings were pending, became time limited prior to the decision issued in the court of second instance.
We are glad that we had a chance to be a co-author of this success.
Andrzej Ladziński, tax counsel, managing partner or GWW Tax, was a legal representative in this case.