Tax books conducted fairly and in a non-defective manner are evidence of what stems from the records contained therein. The provision of article 193 § 1 of tax ordinance recognizes especial probative value of tax books in tax proceedings.

Tax books are specific record-keeping devices in which taxpayers on the basis of separate provisions are required to show economic events affecting tax assessment.

Regional Administrative Court in Lublin on 29 January, 2008 in the decision with sign. act I SA / Lu 726/2007 (LexPolonica no. 1937176), emphasized the importance of tax books. "Although article 181 of tax ordinance gives equal authenticity to all of the evidence contained therein, article 193 § 3 states that tax books have a special value. This specific probative value of the tax books should be interpreted as prohibition of the determination of tax items affecting the amount of tax, without prior ascertainment of keeping the books in an unreliable or inadequate way, which in a given case fell within the scope of probable facts, and which, in accordance with the law, should be recorded in the accounts in accordance with their actual course.”

artykul-51Art. 193 § 1 of the ordinance states that tax books, treated as evidence in tax proceedings, can not be replaced with any other evidence in order to establish the facts reflected in the book records, until misconduct, or defectiveness of these books is ascertained. Tax books shall be deemed reliable if their records reflect the actual situation (article 193 § 2, tax ordinance) Tax books can be deemed defective if they are not kept in accordance with the rules under separate legislation (article 193 § 3, tax ordinance). The provision of art. 193 § 5 of tax ordinance states that formal defects without probative value in tax proceedings, such as lack of chronology, cannot invalidate tax books. This means that reliable and non-defective books are subject to the presumption of correctness of their entries, due to article 193 § 1 of tax ordinance. This presumption may be rebutted, however, by tax authority by showing the unreliability of books or material defects. Rebut of this presumption is based on the content of books in conjunction with other evidence collected in the case. According to article 193 § 6 of tax ordinance, if the tax authority states that tax books are carried out in unreliable or deficient manner, the authority specifies in the protocol for how long and in what part the books are not recognized as proof of what stems from the records contained therein.

In other words, unreliability of the tax books stems from the incompatibility of the provisions contained in the book with the actual course of events that these records should reflect. Unreliability arises when the events which, according to the rules, should be shown in the book, such as income, fail to do so, or when the book shows the events which have not taken place in reality, such as costs which the taxpayer has not suffered. So if tax books unreliability is the actual state of affairs, specified in the provisions of law, which existence depends upon the occurrence of actual events, it should be noted that the unreliability of tax books for tax proceedings is subject to the obligation to prove, just like any other factual circumstance affecting the resolution of tax case in accordance with article 122 and art. 187 § 1 of the tax ordinance.

“Estimated calculation of any element of economic activity - in this case the average margin used in documented sales estimated on the basis of sales from four days of the tax year -  cannot be treated as the starting point of assessing unreliability of tax books. Estimated calculation can not determine if a given tax book is reliable, in other words if its records reflect the actual situation. Estimating is permitted only after the book is recognized as unreliable, which results in failing to classify it as evidence of what stems from the records contained therein (article 23 § 1 in conjunction with 193 § 4, tax ordinance). Therefore, estimating can only be the effect of recognizing a book as unreliable, and not the cause of it." (Supreme Administrative Court in its ruling of 28 May 2003, I SA / Ld 2418/2001 (ONSA 2004 / 2 pos. 71).

The correctness of the calculation of the costs incurred by the taxpayer in order to achieve the income tax is verified by authorities on the basis of so-called accounting records, which the taxpayer is required to run "in accordance with separate regulations, enabling proper income (loss), tax base and tax assessment" (article 9 of a law on income tax from legal persons). Only when the income (loss) assessment in the manner indicated above is not possible, the tax authority - according to the available art. 9 paragraph 2 of the law on income tax from legal persons - calculates "income (loss) by estimating". Verdict of the Supreme Court - Chamber of Labour, Social Security and Public Affairs of 18 December 2003, III RN 136/2002, (LexPolonica No. 365239, Prosecution and the Law - Appendix 2004 / 3 pos. 49, Commonwealth 2003/298 p. 4) .

In literature and jurisdiction tax book auditing is treated as an important step in procedure. Rejection of paper as proof requires rebutting the presumption of conformity with truth, which rests with the tax authority. In the process of examining tax books, tax authority first evaluates books kept by the taxpayer in terms of their material and formal correctness. Then, the tax book data is evaluated in terms of possibility of tax base assessment. In practice, when in the course of the examination or inspection, it turns out that some parts of books are missing or certain irregularities have occurred in their conduct, the authority may not, however, at the appearance of first problems of evidence, such as lack of some records (no revenue records) or irregularities in their conduct, assume that it is necessary to assess the tax base.

When the data from the books turns out to be insufficient, the authority looks for data which, by supplementing incomplete evidence arising from the books, allows for waiver of the estimation. As already indicated, tax book assessment conducted by tax authorities takes into account two areas: formal correctness of the recordings and material evaluation of compliance of taxpayer records with reality. Disqualification of the books presented by the party, due to misconduct, should take place only when the authorities have other evidence, which in an unquestionable way indicates that the data submitted by the taxpayer is not consistent with reality. Assessment may be the ultimate consequence of irregularities in the conduct of the books, causing their rejection, in the absence of other necessary data. It cannot be a part of the analysis or specific evidence acknowledging their wrong conduct. The fact that tax authorities have doubts about the veracity or compliance of the records with facts cannot be the reason for assessment or pretermission of the book in the proceedings.

Body of appeal, possibly the court, should reverse the decision on estimated assessment in two instances: first, when it was possible to estimate the tax base on the basis of accumulated evidence of actual volume of activity conducted by the taxpayer, and second, when the authority has not collected or dealt with the evidence in a comprehensive way, although, according to the directive on tax proceedings, should have done so.

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