The Rationale of Tax Decisions Under Polish Law
The statement of reasons accompanying a tax decision constitutes far more than a mere formality—it represents a fundamental safeguard of taxpayer rights and a cornerstone of administrative due process. When a tax authority renders a determination that adversely affects a taxpayer’s interests, the adequacy of the decision’s rationale becomes a critical locus of potential challenge. This analysis examines the legal requirements governing the substantiation of tax decisions under Polish law, identifies the most prevalent deficiencies that may warrant reversal, and provides a systematic framework for evaluating and contesting inadequate reasoning.
Understanding these principles proves essential for any party engaged in tax litigation or contemplating an appeal from an adverse determination.
I. The Legal Architecture of Decision Rationale
A. Statutory Requirements
Article 210 § 1(6) of the Polish Tax Ordinance (Ordynacja podatkowa) mandates that every tax decision contain both factual and legal justification. The subsequent provision, Article 210 § 4, elaborates upon this requirement with considerable specificity: the factual rationale must identify the facts the authority deemed proven, the evidence upon which such findings rest, and—critically—the reasons for which the authority declined to credit other evidence. The legal rationale, in turn, must articulate the statutory basis for the decision with express citation to the applicable provisions.
This bipartite structure serves an essential guarantor function for taxpayers navigating tax proceedings. As the Supreme Administrative Court (Naczelny Sąd Administracyjny) emphasized in its judgment of April 5, 2023 (Case No. II FSK 2379/20), the requisite elements of a proper rationale include a comprehensive assessment of the evidentiary record in its entirety. The authority may not confine itself to a mere recitation of the evidence adduced; rather, it must explain which evidence it found credible and the grounds supporting that determination.
B. The Persuasion Principle
The rationale requirement operates in tandem with the principle of persuasion articulated in Article 124 of the Tax Ordinance, which obliges tax authorities to explain to parties the grounds underlying their determinations. This principle finds its procedural expression in the rationale itself. The Voivodeship Administrative Court in Olsztyn, in its judgment of January 25, 2023 (Case No. I SA/Ol 551/22), held that appellate authorities bear an affirmative duty to address all demands, motions, and objections raised by the taxpayer. The silent disregard of a party’s contentions constitutes a violation of the rule of fair proceeding (reguła uczciwego procesowania).
II. Taxonomy of Deficiencies in Decision Rationale
A. Incomplete Treatment of Evidence
Perhaps the most frequently occurring deficiency involves the authority’s failure to address evidence that contradicts its preferred conclusion. The Voivodeship Administrative Court in Gdańsk, in its judgment of June 12, 2024 (Case No. I SA/Gd 178/24), articulated this principle with particular clarity: where manifest inconsistencies exist among documentary evidence, the authority must identify the facts it deems established and explain why it declined to credit particular items of evidence. Selective treatment of the evidentiary record constitutes a material procedural violation.
This requirement reflects a broader principle: the evidentiary assessment prescribed by Article 191 of the Tax Ordinance—which provides that the authority evaluates evidence on the basis of the entire collected material—admits of no exceptions. As the Voivodeship Administrative Court in Kraków observed in its judgment of February 21, 2024 (Case No. I SA/Kr 1166/23), evidentiary assessment must encompass the whole of the gathered material, with due consideration of all attendant circumstances. Piecemeal analysis cannot satisfy the statutory mandate.
B. Internal Inconsistency
A rationale that exhibits internal contradiction or lacks intelligibility cannot fulfill its intended function. The Supreme Administrative Court, in its judgment of August 1, 2018 (Case No. II FSK 2083/16), held that an incoherent rationale necessarily warrants reversal of the underlying decision. This principle applies with particular force where the authority presents mutually exclusive findings or where its conclusions do not follow logically from the stated premises.
The rationale must constitute a unified analytical whole. Where the factual narrative points in one direction while the legal analysis proceeds in another, or where different sections of the rationale rest upon incompatible assumptions, the decision fails to satisfy minimum standards of administrative regularity.
C. Failure to Address Party Contentions
The guarantor function of the rationale requirement necessarily entails engagement with the arguments advanced by the taxpayer. The Voivodeship Administrative Court in Poznań, in its judgment of February 2, 2023 (Case No. I SA/Po 578/22), explained that the principle of informing parties about decisional grounds requires that the rationale comprehensively convey the considerations that guided the authority’s resolution of the matter, reflect the authority’s reasoning process, and—in particular—contain an assessment of the evidentiary material gathered in the proceeding.
Upon the authority devolves the obligation to explain the grounds of its determination in a manner that enables both the party to understand its position and the reviewing court to conduct meaningful judicial scrutiny. Silence in the face of taxpayer arguments does not constitute a response.
D. Inadequate Legal Analysis
The legal portion of the rationale may not consist solely of statutory citations; the authority must explain its interpretation and application of the cited provisions to the established facts. Leading commentary to Article 210 of the Tax Ordinance emphasizes that where the applicable provision admits of interpretive doubt, the authority must identify that circumstance and explain its resolution thereof. The absence of such engagement may itself constitute an independent ground for appeal.
This requirement assumes heightened significance in light of Article 2a of the Tax Ordinance, which codifies the principle of resolving irremovable doubts concerning the content of tax law provisions in favor of the taxpayer (in dubio pro tributario). The rationale should make apparent whether the authority confronted interpretive ambiguities and, if so, how it addressed them.
III. Strategic Framework for Challenge
A. Assessment of Factual Completeness
The reviewing party should first examine whether the authority addressed all evidence of record. Under Article 191 of the Tax Ordinance, the authority’s assessment must rest upon the entirety of the gathered material. The omission of particular evidence or its selective evaluation transgresses the principle of free evaluation of evidence (zasada swobodnej oceny dowodów), transforming it into impermissible arbitrary evaluation (ocena dowolna).
Particular attention should be directed to evidence favorable to the taxpayer’s position. Where such evidence appears in the record but finds no reflection in the rationale, the omission provides fertile ground for challenge.
B. Logical Coherence Analysis
The authority’s conclusions must follow from its stated premises in accordance with the principles of logic and common experience. Conclusory assertions unsupported by analytical demonstration cannot satisfy the rationale requirement. The reviewing party should trace the inferential steps from evidentiary findings through legal analysis to ultimate conclusion, identifying any logical gaps or non sequiturs.
C. Two-Instance Principle Verification
Where the decision under review issued from an appellate authority, the reviewing party should verify that the second-instance body genuinely reconsidered the matter de novo rather than merely reviewing the first-instance determination for error. The Voivodeship Administrative Court in Gdańsk, in its judgment of August 20, 2024 (Case No. I SA/Gd 349/24), emphasized that mere reference to the first-instance rationale cannot substitute for the independent assessment required of the appellate authority.
The two-instance principle (zasada dwuinstancyjności) mandates two full considerations of the matter, not one consideration followed by one review. Where the appellate decision essentially incorporates the lower authority’s analysis by reference, the principle has been honored in form but violated in substance.
D. Statute of Limitations Considerations
In matters where the authority invokes suspension of the limitation period by reason of pending fiscal penal proceedings, the rationale should contain analysis demonstrating that the initiation of such proceedings did not serve merely instrumental purposes—that is, did not constitute a pretextual device to extend the assessment period. The Supreme Administrative Court’s resolution of May 24, 2021 (Case No. I FPS 1/21) requires that in doubtful cases—particularly where the commencement of penal proceedings occurs proximate to the limitation date—the authority explain this circumstance in its rationale.
The absence of such analysis, where circumstances suggest potential instrumentality, itself constitutes a procedural deficiency susceptible to challenge.
IV. Formulating Grounds for Appeal
Effective appellate advocacy requires precise identification of the rationale’s deficiencies with reference to specific textual passages and the procedural provisions thereby violated. Merely asserting disagreement with the outcome will not suffice; the challenge must demonstrate how the authority’s reasoning process deviated from legal requirements.
Viable grounds relating to rationale deficiency may include: violation of Article 210 § 4 through failure to explain the reasons for declining to credit particular evidence; violation of Article 191 in conjunction with Article 187 § 1 through incomplete assessment of the evidentiary material; and violation of Article 124 through failure to explain the grounds of the determination.
Taxpayers pursuing representation in tax disputes before the courts should ensure that their grounds for challenge are articulated with sufficient specificity to enable meaningful judicial review.
V. Standard of Review and Remedial Consequences
Not every deficiency in the rationale compels reversal. Administrative courts assess whether the procedural violation could have materially influenced the outcome. However, rationale defects occupy a distinctive position in this analysis.
As the Voivodeship Administrative Court in Wrocław observed in its judgment of January 18, 2023 (Case No. I SA/Wr 577/22), the preparation of the rationale carries substantive significance beyond mere formal compliance, affecting the possibility of judicial review. The absence of even summary consideration of circumstances material from the perspective of substantive or procedural law engenders justified suspicion that the authority failed to conduct comprehensive analysis of the matter—and that had it discharged this obligation, its resolution of particular issues might have differed.
The Voivodeship Administrative Court in Szczecin, in its judgment of October 2, 2024 (Case No. I SA/Sz 161/24), emphasized that a properly prepared rationale affords the possibility of full and substantive judicial verification. The reviewing court may not supplement the administrative proceeding with legal argumentation or substitute its judgment for that of the authority concerning whether statutory prerequisites were satisfied.
VI. Conclusion
The rationale of a tax decision functions as the primary mechanism through which the authority demonstrates that its determination rests upon reasoned analysis rather than arbitrary fiat. Taxpayers confronting adverse decisions should scrutinize the rationale with care, examining it for completeness, coherence, and genuine engagement with the evidentiary record and applicable law.
Where deficiencies appear, they may provide not merely rhetorical ammunition but independent legal grounds for reversal. The procedural requirements governing rationale content exist precisely to ensure that tax administration operates through reason rather than mere assertion of authority. Their enforcement, through diligent appellate challenge and judicial review, serves both individual justice and systemic rule-of-law values.
The fourteen-day period for administrative appeal and the thirty-day period for judicial review before administrative courts impose temporal constraints that counsel prompt analysis. Where the stakes warrant, professional assistance from qualified tax advisors may prove invaluable in identifying deficiencies that might escape lay observation and in framing challenges with the precision that effective advocacy demands.
This analysis is provided for informational purposes and does not constitute legal advice. Taxpayers confronting specific decisions should consult qualified counsel regarding their particular circumstances.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.
