Dr Ewelina Stobiecka

Attorney at law

I’ve been supporting entrepreneurs for almost twenty years in resolving commercial disputes in and out of court. I represent my clients as an attorney and negotiator and also act as a commercial mediator...
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Mediation in tax proceedings

Ewelina StobieckaComments (0)

Mediacja w sprawach podatkowych

Mediation in tax law is one of the so-called “non-sovereign” forms of dealing with tax matters and as such it has not covered by Polish tax law so far.

A lot has been written about mediation in commercial disputes, mediation with the public sector has also been somewhat louder recently. Mediation in tax proceedings is less known and has not been used in Poland so far. The importance of using this alternative to court method of resolving disputes between entrepreneurs in the area of taxes was highlighted in the recommendations developed by the British-Polish Chamber of Commerce and prepared on the basis of exchange of good practices with experts from the United Kingdom and the broad business and tax practice of its member companies. 

The British-Polish Chamber of Commerce collected the most important recommendations concerning the tax system and the interaction between tax authorities and taxpayers and among the recommendations which are completely new for the Polish practice and legal environment is the strengthening of institutions of mediation in the area of taxes. 

The recommendations mentioned above argue that it is necessary to develop internal rules for the use of mediation for the tax administration and to include a system of incentives for their use. Moreover, it has also been pointed out that it is necessary to relieve an official who used mediation in a manner similar to the provision concerning settlements in civil proceedings from liability. When preparing the cited recommendations, it was established on the basis of data from the HM Revenue & Customs (Annual Report and Accounts 2017-2018) that the United Kingdom reported a 62% increase in the collection of disputed taxes as a result of mediation. The fiscal years under review are 2016 to 2017 and 2017 to 2018. 

The quoted research of the institution dealing with tax collection in Great Britain clearly indicates that the use of mediation in this area of state activity may be associated with a real benefit for the state budget. 

Is this a good solution for Poland?

It should be noted that also in Poland we have a draft amendment to the Tax Ordinance of 4 July 2018, where the justification stresses that mediation is established as a procedural mechanism facilitating communication between the tax authority and the debtor, and it is not a substantive dispute resolution mechanism. This type of solution applied in the draft Tax Ordinance Amendment Act, introduced into Chapter 11 of the Act (in articles 383 to 399), is de facto supported by negotiations between the tax authority and the taxpayer as a party to proceedings. Thus, we can also expect the introduction of mediation institutions to administrative proceedings concerning tax liabilities in Poland. 

As indicated in the literature on this subject, this mediation was formed with respect for the principles of voluntariness, impartiality, neutrality and confidentiality. Initiation of a mediation procedure is allowed at any stage of tax proceedings. The scope of mediation proceedings specified in the draft act provides that mediation may be conducted in cases where a tax agreement may be concluded. Thus, the purpose of mediation is to lead to the conclusion of a tax agreement, which is also a new institution introduced in the draft act in Chapter 10. 

Polish tax mediation solutions apply, among others, a time limit for completion of mediation, which may not exceed two months from the date of issue of the decision to refer the case to mediation. At the request of the mediator and with the consent of the party, the tax authority may extend the time limit in the form of a decision for the time necessary to complete the mediation. As in the case of a civil lawsuit, this time limit will not be included in the time limit for settling the case. As a rule, such mediation may be conducted by a mediator entered on the list of mediators, which will be conducted by the head of the National Tax Administration. The mediator will also be the Taxable Person’s Rights Ombudsman. 

The regulation amending the tax law also provides for a number of further detailed solutions concerning the conduct of mediation in taxes, which are known to be, among others, commercial mediation, provided for cases conducted in ordinary commercial proceedings. 

The justification for the draft act states that tax mediation may take the form of facilitation mediation, i.e. classic assisted mediation, where the mediator’s role is only to facilitate the agreement between the parties, i.e. the mediator does not propose or suggest a solution, and therefore does not need to have substantive knowledge of the subject matter of the case. However, the mediation described in the draft Tax Ordinance may be similar to an evaluation mediation, i.e. one in which a mediator with specialist knowledge may suggest a solution to the dispute to the parties. 

The decision to conclude a tax agreement to complete the mediation process is always a decision of the party and the tax authority. The solution proposed by the draft Tax Ordinance Act therefore meets the recommendations formulated by the Polish-British group of experts, gathered around the British-Polish Chamber of Commerce. Of course, it is also justified by social reasons and corresponds to the values underlying the relationship between taxpayers and tax authorities in a democratic state of law. The entry into force of the tax ordinance is scheduled for 1 January 2020 and from that date onwards, tax mediation will be possible. Whether this institution will work in practice will show us the future. Nevertheless, we should positively assess the introduction of mediation in increasingly wider use in disputed cases in various areas of business activity.

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Dr Ewelina Stobiecka

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