The Statute of Limitations on Tax Obligations and the Decisive Moment of Service
Pursuant to Article 70 § 1 of the Polish Tax Ordinance, tax obligations become time-barred upon the expiration of five years, calculated from the end of the calendar year in which the tax payment deadline occurred. In practice, this statutory framework may afford tax authorities a collection window approaching six years. Nevertheless, fiscal organs frequently fail to observe even these generous temporal boundaries—and the legal consequences of such procedural lapses prove unforgiving.
The Supreme Administrative Court’s judgment of January 16, 2019 (case no. II FSK 295/17) affirmed a principle of fundamental significance to taxpayers: for purposes of tolling the statute of limitations on tax obligations, the determinative moment is the service of the decision upon the taxpayer, not merely the date of its issuance.
Factual Background
The dispute concerned a joint-stock company against which the tax authority assessed a real property tax liability for the 2010 fiscal year. A tax audit revealed that the company’s declared sale of telecommunications infrastructure had excluded certain cable lines. The fiscal authority maintained that the value of these cables—as constituent elements of structures connected with business operations—ought to have augmented the taxable base.
The company mounted a defense, contending that a portion of the cable lines situated within the conduit system belonged to a separate legal entity. The tax authority, however, invoked Article 3 of the Act on Local Taxes and Charges, which provides that the taxpayer is the owner of the entire structure, and that structures or their constituent parts connected with business operations remain subject to taxation.
By decision dated December 18, 2015, the Local Government Board of Appeals upheld the first-instance determination.
The Limitations Defense as the Foundation of the Legal Challenge
The company filed a complaint against the tax decision with the Voivodeship Administrative Court in Białystok, advancing two grounds for relief. The first addressed substantive matters—the company contested the propriety of taxing cable lines whose ownership did not correspond with ownership of the conduit infrastructure. The second ground, however, was procedural in nature and ultimately proved dispositive.
The appellant argued that the limitation period for the 2010 real property tax obligation expired on December 31, 2015. The appellate authority’s decision, however, was served upon the company only on January 4, 2016—that is, subsequent to the expiration of the statutory limitations period.
The Voivodeship Administrative Court’s Erroneous Reasoning: Issuance Over Service?
The Voivodeship Administrative Court dismissed the complaint as unfounded. On the limitations question, the court adopted the position that service of a decision merely effectuates its entry into legal circulation, whereas the decision attains finality as of the date of its issuance.
The court reasoned that adopting the contrary view “would lead to the irrational conclusion that an appellate authority cannot issue a decision solely because the limitation period might expire following its issuance.”
This reasoning—though superficially logical—failed to account for the fundamental principle of tax law governing the moment at which an administrative decision acquires legal effect.
The Supreme Administrative Court: A Decision Binds Only Upon Service
The Supreme Administrative Court, in its judgment of January 16, 2019, vacated the lower court’s decision and remanded the matter for further proceedings. The cassation panel confined its analysis exclusively to the limitations defense—and this alone sufficed to resolve the case.
The Court observed that, pursuant to Article 210 § 1(2) of the Tax Ordinance, the date of issuance constitutes an essential element of any tax decision, establishing the factual and legal circumstances considered at the time of its rendering. This does not, however, signify that the decision produces legal effects from that date.
The critical provision is Article 212 of the Tax Ordinance, which stipulates—with the exception of decisions granting relief from tax payment obligations under Article 67d—that a tax authority becomes bound by its decision only from the moment of its service upon the party.
The Court emphasized: “Until the moment of service, a decision may be modified without necessity of initiating formal procedures for amendment or revocation. Thus, so long as a decision determining a tax obligation in an amount different from that declared by the taxpayer has not been served upon the addressee, the presumption obtains that the taxpayer correctly determined the obligation and tax due in the declaration.”
The Holding: Practical Implications for Taxpayers
The ratio decidendi of case II FSK 295/17 admits of no ambiguity:
“For purposes of determining whether the legal effect of a decision—namely, the determination of a tax obligation—occurred prior to the expiration of the limitation period, the relevant date is that of service of the decision, not the date of its issuance.”
It follows that a decision served after expiration of the limitation period cannot overcome the presumption arising from the taxpayer’s declaration regarding the magnitude of the tax obligation. The Court invoked an established line of authority (judgments: II FSK 2466/14, II FSK 333/14, II GSK 1214/14, II FSK 1683/14, II FSK 2074/14, II FSK 38/15).
The Presumption of Correctness Under Article 21 § 5 of the Tax Ordinance
The judgment in II FSK 295/17 underscores the significance of the principle articulated in Article 21 § 5 of the Tax Ordinance. Under this provision, where tax law imposes upon a taxpayer the obligation to file a declaration, the tax shown therein constitutes the amount due—unless the tax authority issues a decision determining a different liability.
Critically, however, such a decision must be effectively served prior to expiration of the limitation period. The mere date of issuance neither tolls the running of limitations nor displaces the presumption of correctness attaching to the declaration.
Administrative Practice: Action at the Eleventh Hour
The case reveals a troubling pattern in administrative conduct. The fiscal authority possessed five years—260 weeks—to render a final decision determining the tax obligation. Yet the appellate decision was issued a mere fortnight before the limitation period’s expiration, with service occurring only thereafter.
Such dilatory conduct imposes substantial burdens upon taxpayers, who must endure years of uncertainty regarding their financial position—both personal and commercial.
Abuse of Instruments Extending Limitation Periods
The practice of issuing decisions on the eve of limitations expiration recalls another mechanism employed by fiscal authorities—the initiation of fiscal penal proceedings for the purpose of suspending the running of the limitation period on tax obligations.
The Constitutional Tribunal identified this concern as early as 2012. In its judgment of July 17, 2012 (case no. P 30/11), the Tribunal expressed the presumption that “the sole purpose of fiscal authorities initiating fiscal penal proceedings shortly before expiration of the five-year limitation period is to suspend the running of the limitation period on tax obligations.”
The Tribunal acknowledged that the mere potential for abuse of state authority does not, per se, furnish sufficient grounds to declare a provision unconstitutional. Nevertheless, “concerns of this nature may give rise to doubts regarding the compatibility of Article 70 § 6(1) of the Tax Ordinance with the principle of protection of citizens’ trust in the state and the law it enacts.”
Significance for Tax Litigation
The judgment in II FSK 295/17 carries substantial practical import for taxpayers engaged in disputes with the tax authority. In any matter where the limitation period approaches, practitioners must meticulously verify:
- the dates of issuance of both first-instance and appellate decisions,
- the date of actual service upon the taxpayer,
- any circumstances that may suspend or interrupt the running of limitations.
Even where a decision was issued prior to expiration, its service after that date signifies that the obligation has been extinguished by operation of the statute of limitations. In such circumstances, the foundation for a complaint to the administrative court should rest upon an alleged violation of Article 70 § 1 in conjunction with Article 212 of the Tax Ordinance.
Defensive Strategies Against Time-Barred Fiscal Claims
A taxpayer who receives a decision determining a tax obligation after expiration of the limitation period should consider the following procedural responses:
- File an administrative appeal — Where the decision originates from a first-instance authority, an appeal against the tax decision must be lodged within fourteen days, raising the limitations defense.
- Challenge the decision before the Voivodeship Administrative Court — Should the appellate authority reject the limitations argument, the appropriate remedy is a complaint to the administrative court of first instance.
- Pursue cassation review before the Supreme Administrative Court — An adverse judgment from the Voivodeship Administrative Court may be challenged through a cassation appeal to the Supreme Administrative Court.
- Document all service dates — In tax proceedings, evidence establishing the actual date of service assumes critical importance.
Conclusion
The Supreme Administrative Court’s judgment of January 16, 2019 (II FSK 295/17) constitutes a significant affirmation of the procedural safeguards available to taxpayers. The institution of limitations on tax obligations serves a protective function—ensuring legal certainty and guarding against the indefinite assertion of state claims.
Tax authorities that delay until the final moment in issuing and serving decisions assume the risk of limitations expiration. As the instant case demonstrates, even a delay of several days in effecting service may prove determinative of the obligation’s extinction.
For taxpayers, the lesson is unambiguous: in every tax dispute, one must scrupulously examine the relevant temporal markers—not merely the date of issuance, but above all the date of service. The principle of in dubio pro tributario mandates resolution of interpretive doubts in favor of the taxpayer, and the judgment in II FSK 295/17 confirms that the administrative courts remain steadfast guardians of this principle.
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.
