Winning a dispute with the Head of the Inland Revenue Office

The dispute began in 2016, as a result of a tax inspection by the Head of the Inland Revenue Office at our client-entrepreneur operating a business.

During the audit, his marketing strategy of selling part of the goods offered in sets for PLN 1 was questioned. In the opinion of the tax authority, this constituted a violation of the principle of neutrality of the tax on goods and services and resulted in an understatement of the tax base.

Our client did not agree with the findings of the audit, therefore tax proceedings were initiated in this case, which ended with a decision unfavourable to the taxpayer issued in 2018. In this decision, the tax authority maintained its position regarding the irregularities found during the audit. The decision of the Head of the IR Office determined our Client’s obligation to pay the VAT.

As a result of the appeal filed by attorney-at-law Krzysztof Topolewski, the Director of the Tax Administration Chamber in Poznań repealed the decision of the tax authority of the first instance. The appeal authority accepted the Law Firm’s argument that a sale for a “token zloty” is not illegal if the price is justified by economic factors accompanying the transaction, e.g. if it is part of the taxpayer’s strategy to strengthen its position in the market and increase the sales volume.