Since January 2018, so-called STIR – Information System of the Reconciliation Chamber – has been introduced in Poland. The system is a set of algorithms, introduced with the aim to analyze data provided obligatory by financial institutions (including banks) to the Polish tax authorities. The purpose of implementing this system is to identify taxpayers avoiding taxation and as a result to reduce the VAT gap by counteracting fiscal crimes committed with the participation of the financial sector.
The system will capture abnormal transactions and provide information about them to tax authorities. In order to do so, an analysis of taxpayers’ activities through financial institutions will be performed, in order to identify tax frauds on the basis of the following criteria:
- economic – assessment of transactions in terms of justification from the perspective of taxpayer’s business;
- geographical – concluding transactions with entities from countries in which there is high threat of committing a tax fraud;
- objective – conducting business activity with a high risk from the point of view of vulnerability to tax extortion;
- behavioral – unusual, in a given situation, behavior of the entrepreneur;
- links – existence of links between the entrepreneur and entities that are at risk of being involved in activities related to tax frauds or organizing such activities.
Based on the obtained information, it will be possible for Polish tax authorities to block the entrepreneur’s account for 72 hours, as well as to extend this blockage for up to 3 months – when there is a risk of extortion of the amount higher than 10,000 euros. In practice, the application of such a mechanism may result in insolvency of the entrepreneur and the necessity to terminate his business activity.
In case of blocking the account, with the permission of the head of National Treasury Administration, the entrepreneur will be able to use the funds from his bank account for limited purposes only, including among others:
- payment of salaries to employees (this applies to employment contracts concluded at least 3 months before the date of blocking the account);
- for maintenance or disability benefits;
- payment of other tax liabilities.
The option to block a bank account will not apply to private individuals’ accounts. However, if a given entrepreneur runs only one account for both business as well as for private purposes, these regulations will apply to such persons.
Although the act itself has been in force since January 2018, the possibility of blocking amounts on bank accounts will materialize from the end of April 2018.
What is interesting, taxpayers do not have the opportunity to learn how algorithms of STIR function – it is known only to the National Treasury Administration. As a consequence, taxpayers will not be able to verify why their transaction was deemed abnormal.
Due to the strong interference of the new regulations with the right to property and the freedom to conduct a business, it is commonly upheld among tax advisers that they should be used prudently when there is no doubt that the transaction was used to commit a crime. Account blocking should be an exceptional action, used in special circumstances. However, the practice will show what the attitude of tax officials will be towards this issue.
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