It may well be worth asking for a general assessment of the impact of judicial and administrative judicature on the law governing the taxation on goods and services in the EU version that has been in force in our country since 2004. Earlier in 1993-2003, erstwhile we had our own first version of the tax, no 1 had always heard of the "tax carousels", the mass extortions of this taxation and the organized frauds that settled over the Vistula under the fresh law governing this taxation since 1 May 2004. Was the scale of these frauds unknown in past due to the implementation of pathological EU solutions? Or was there our “local contribution” to this work, and what function did the authoritative judicial and administrative doctrine play here? This problem was already the subject of a study prepared in 2018 on behalf of the Public Finance Commission of the Polish Parliament, so the question is not new. Of course, this article does not aspire to a comprehensive assessment of this impact. Today, I will confine myself to presenting any phenomena that may have had an impact (and most likely had) on the scale of taxation evasion and, more broadly, on the simplification in the fiscal efficiency of this tax.
The scale of returnless losses in income from this tax, already calculated in hundreds of billions of PLN, is unprecedented. So there is something to think about and look for the factors responsible. We remember well the misleading media propaganda of 20 years ago about this tax: the fresh authorities told us at the time that the EU version of this taxation is "simple", "fiscally efficient" and besides safe for honest taxpayers. Did they deliberately mislead the public in order to later drag hundreds of thousands of companies into "tax carousels"? Today, it doesn't matter. The affected taxpayers remember these "experts" well, and their function will not be forgotten. The authoritative doctrine, including taxation judicature, of course should distance itself from its narrative, due to the fact that it should stand on the side of law, public interest and taxation knowledge. At least this should be the case; the judicature should be characterised by cognition of the law, including the conceptual flaws of the EU VAT version, which were already known to those who dealt with this taxation 20 years ago. However, any NSA resolutions over the past 20 years may have shocked those who believed in the constructive function of authoritative legal doctrine. The 2011 resolution, which indicated that the taxpayer’s performance of activities which are absolutely non-taxable (i.e. ‘not taxable), gave the payer the right to deduct, i.e. the taxpayer’s rights. After all, this is an apparent logical error: a individual who performs an activity outside the scope of his position as a taxable individual cannot have the rights of a taxable person. Let me give a simple example: the author of this text is an active VAT taxable person, but erstwhile writing this text he performs absolutely non-taxable activities. It cannot so exercise the right it has as a taxable person. Simple? Of course I do. Therefore, a resolution was adopted which opened the door to the nature of undue deductions of input tax? possibly the authors would answer this question by giving it an "authentic interpretation"?
It is not known precisely how much money he lost as a consequence of the usage in practice of this resolution, although it is possible (and necessary) to effort to estimation these losses. To my best knowledge, an crucial part of taxpayers ignored the conclusions resulting from it, stating that it was not a misinterpretation of the rules, but a contra leg. Years later, the judgement of the CJEU in this case questioned the compatibility of this view with EU law. It is incomprehensible that a abroad law must be invoked to negate a view which is manifestly contrary to the law: a non-taxable entity does not have the right of a taxpayer.
Of course, there are besides examples of a constructive judicature that improved this taxation by reducing the disadvantages of its EU version. I will talk about these and another examples in the following episodes.
Prof. Witold Modzelewski
