Poland: Peculiarities of Applying the General Anti-Tax Avoidance Clause

 

The general anti-tax avoidance clause was introduced into the Polish legal system by the Act of 13 May 2016 and has been in force since 15 July 2016. It is set out in Articles 119a–119f of the Tax Ordinance. The clause allows tax authorities to disregard the tax consequences of actions deemed artificial and aimed solely at obtaining a tax benefit.

The first attempt to introduce a similar regulation occurred in 2003 by adding Article 24b to the Tax Ordinance, which allowed tax authorities to disregard the effects of actions taken “for the purpose of circumventing the law.” This attempt failed. At the time, the Constitutional Tribunal was significantly more restrictive in its tax rulings and generally upheld taxpayers’ rights. In its judgment of 11 May 2004 (ref. K 4/03), the Tribunal found the provision unconstitutional, citing violations of:

the principle of citizens’ trust in the state and the law (Article 2 of Polish Constitution),
the principle of specificity of tax law provisions (Article 217),
the principle of freedom of economic activity (Article 22).

As a result, Article 24b was repealed.

The current structure does not differ significantly from its previous, unconstitutional version. It presents the same issues with the specificity of tax obligations and trust in the state and the law. In 2016, the legislator did not even attempt to conceal that the idea behind the new–yet–old clause was to introduce a degree of uncertainty to curb so-called aggressive tax planning. However, the procedure for applying this clause is notably different and was intended to compensate for the apparent violations of fundamental principles of tax lawmaking.

Proceedings concerning the application of the GAAR clause were (ostensibly) transferred to the highest level of the tax administration and may be conducted only by the Head of the National Revenue Administration (Szef KAS). Since there is no higher authority, appeals against the Head’s decisions are also submitted to the Head of KAS. The issue is that, under the Regulation of the Minister of Finance of 24 November 2023, the general anti-tax avoidance clause (GAAR) may also be applied by the heads of four local customs and tax offices: the Małopolska Customs and Tax Office in Kraków, the Mazowieckie Customs and Tax Office in Warsaw, the Podkarpackie Customs and Tax Office in Przemyśl, and the Podlaskie Customs and Tax Office in Białystok.
Before issuing a decision, the tax authority may – and in second-instance proceedings, at the taxpayer’s request, must – seek the opinion of the Council for Counteracting Tax Avoidance (RPUO). The Council’s opinion is not binding but constitutes an important element of the proceedings. This body is the most peculiar feature of the procedure.

The RPUO is an independent advisory body appointed by the Minister of Finance. It includes representatives of the ministry, academia, and the tax advisory profession. Its composition changed significantly at the end of 2024, which appears to have influenced a shift in its jurisprudence. Its resolutions are published, giving insight into the essence of proceedings conducted under the GAAR clause. In 2024, the Council issued 10 resolutions, all of which were in line with the position of the Head of KAS. In 2025, the new Council issued 4 resolutions, of which only one fully agreed with the Head of KAS. It seems the new Council is more critical of the tax administration’s actions. This does not mean it is more tolerant of various forms of “tax optimisation.” From the few rulings available, it can be inferred that the Council interprets the clause more strictly. For example: Where other tax law provisions can be applied to assess additional tax, the clause should not be used. The tax benefit must also be strictly defined, both in terms of the beneficiary and the nature and amount of the benefit. In the absence of sufficient administrative court rulings on the clause, the Council’s activity plays an important supervisory role.

Regardless of the above, data published by the Head of KAS for Q4 2024 shows that taxpayers’ chances in such proceedings are slim:
– In 2024, 47 new GAAR proceedings were initiated. Since 2016, the following decisions have been issued:
• 78 in PIT cases,
• 67 in CIT cases,
• 26 in other taxes.
– In 2024, only 4 proceedings were discontinued, one due to voluntary correction.
– As a second-instance authority, the Head of KAS upheld 77% of first-instance decisions and overturned and ruled on the merits in only 5% of cases.

This low number of decisions relative to the number of initiated proceedings also shows how long such proceedings can last. The Ministry of Finance is not keen to publicise such statistics. Nevertheless, assuming that the tax proceedings before the Head of KAS are usually preceded by a customs and tax audit (UCS), which lasts on average 1.5 years, the taxpayer faces a multi-year dispute. In our law firm’s practice, none of the proceedings concluded with a first-instance decision in under two years.

 

For further information, please contact:

Marcin Gorazda, Managing Partner

Gorazda, Świstuń, Wątroba i Partnerzy adwokaci i radcowie prawni, Kraków

e: marcin.gorazda@gsw.com.pl

 

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