Within 4 years, the head of the tax office extended the deadline for VAT refund to the company 6 times. Finally, he lost to the entrepreneur before the court, which ruled that “… the first of the Governor’s decisions to extend the deadline for the return of the excess input tax over the tax due (…) did not include the date by which the return was extended. It is a defect that cannot be removed by issuing further decisions ”(judgment of the Provincial Administrative Court in Poznań of September 29, 2021, file reference number I SA / Po 864/20).
The head of the tax office carried out an inspection of the entrepreneur, as a result of which he concluded that the company was involved in a VAT carousel fraud. Therefore, despite the VAT declaration she submitted for July 2016, in which she showed an excess of input VAT over due VAT, she did not receive a VAT refund. Already in August 2016, the tax authority extended the deadline for this return until the end of the tax audit. The company appealed against this decision.
The entrepreneur appealed, but the tax authorities defended each other
In March 2017, the decision of the first instance authority was upheld by the director of the tax administration chamber. The company appealed against them and won. In November 2017, the provincial administrative court revoked the decision of the director, but in December 2018 the head of the tax office extended the deadline for VAT refund again, this time until April 30, 2019. This decision was upheld by the director of the tax administration chamber. in April 2019, the entrepreneur also appealed against this decision. In the same month, the head of the tax office extended the deadline for VAT refund for the company – until June 28, 2019. The company appealed again, and the head’s decision was once again upheld by the second instance authority.
By the decision of June 2019, the head of the tax office extended the deadline for VAT refund for the fourth time, this time until September 30, 2019. The entrepreneur again appealed, and in October 2019 the director of the tax chamber defended the head of the tax office once again. Thanks to this, the head of the tax office in September, instead of returning the money to the company or presenting arguments justifying the refusal to return, for the fifth time extended the return date – this time until January 31, 2020. The company appealed again, and the director of the tax chamber again did not agree to cancellations. In December 2019, the entrepreneur challenged the director’s actions in court.
Extending the deadline for VAT refund to the company 6 times, because the body is “planning” to act
Finally, not doing anything about the complaint, in January 2020 the head of the tax office extended the deadline for the refund of the excess VAT charged to the company for the sixth time – until April 30, 2020. As the authority justified, the sixth extension of the VAT refund procedure to the company, made despite judgments issued by courts and numerous appeals of the entrepreneur, is still at the stage of collecting and analyzing evidence in the field of disputed deliveries, which includes the disputed VAT settlement of the company. Currently, the materials received from other tax offices, competent for individual companies participating in the supply chain specified by the head of the VAT carousel are analyzed. As indicated by the head of the tax office, “it is planned” to apply to several prosecutor’s offices for access to evidence concerning certain entrepreneurs collected by investigators in the course of criminal proceedings.
The legitimacy of the return is still under investigation
On January 27, 2020, the company filed a complaint against the above-mentioned resolution. The director of the tax administration chamber did not consider them until October 2020 and – as it was to be expected based on the previous decisions of the appeals lodged by the company – upheld the head’s decision on the sixth extension of the VAT refund, explaining that the head of the tax office was seeking to full explanation of all circumstances of the case. The entrepreneur had access to information from the inspection body conducted by the inspection authority, and could submit explanations in support of his reservations. The authority recognized all these objections, but they did not affect its assessment and did not lead to the resignation from further verification of the legitimacy of making the disputed VAT refund to the company.
This justification is therefore still under investigation.
The Provincial Administrative Court in Poznań examining the complaint brought by the entrepreneur, upon the company’s request, stayed the proceedings until the end of the proceedings conducted by the Supreme Administrative Court on cassation appeals brought by the director of the tax administration chamber against the aforementioned judgments in its case favorable to the company. The NSA dismissed these complaints, therefore, in August 2021, the Provincial Administrative Court resumed the suspended proceedings.
Based on the above-mentioned the decision of the Supreme Administrative Court, the court recalled that the deadline for VAT refund to the taxpayer may be extended by issuing further statements on this subject, however, when any of the provisions is eliminated from legal circulation, the sequence of further extensions is interrupted. Therefore, an order issued after such an order removed from the market may not have the intended effect. And because in the present case of the company, the first of the six decisions of the head of the tax office to extend the deadline for VAT refund to the company did not include the date by which the deadline for refund was extended, this is a defect that cannot be removed by issuing subsequent decisions.
“… only extending the tax refund deadline by date makes it possible to maintain and respect the rule that only the deadline that has not yet expired can be extended. (…) If the date of the extension of the VAT refund is not included in the operative part of the decision, such a decision generally escapes judicial review. This is because only in the case of indicating the extension of the deadline according to dates, the court can assess whether the verification of the taxpayer’s settlement has been properly planned in terms of time. (…) In the realities of the present case (…) the first decision of the Head (…) did not include the date by which the return period was extended. It is a defect that cannot be removed by issuing further decisions ”(judgment of the Provincial Administrative Court in Poznań of September 29, 2021, file reference number I SA / Po 864/20).
Therefore, another 5 decisions of the head of the tax office regarding the extension of the deadline for VAT refund to the company did not exist. This means that the director of the tax administration chamber should have acceded to the dismissal of the company by March 2017 at the latest. At the same time, the head of the tax office should have returned the money due to the entrepreneur. The above case clearly shows how the actions of the tax office look in practice, which for years withholds funds due to entrepreneurs, repeatedly extending the deadline for returning the tax due to them.
Skarbiec Law Firm