Extended powers of tax offices. Who will look into our accounts?
Until now, strictly defined tax authorities have been able to request bank information on individuals who have the status of suspects, i.e. those who have been formally charged. From the beginning of July, the request will be able to apply to everyone without exception, and the heads of 400 tax offices operating in Poland will also be able to access bank data. However, the Ministry of Finance does not exclude that the provisions that allow for far-reaching interference in citizens’ privacy will be amended.
On July 1, 2022, regulations that will significantly broaden the scope of powers of the National Tax Administration will come into force. It is about access to bank information. In the current state of the law, the bank is obliged to prepare and provide information on a suspect or a legal person or an organizational unit without legal personality in the event that preparatory proceedings or explanatory activities are conducted in connection with acts committed in the scope of activity of a legal person or an organizational unit without legal personality. Disclosure of information by the bank takes place upon written request of the Head of the National Fiscal Administration or the head of the customs and tax office issued in connection with initiated investigation or explanatory activities in the case of, respectively, crimes or contraventions and fiscal crimes or contraventions.
The scope of information that the bank has to provide in such a situation is very broad and concerns in particular the accounts held or co-held, the turnover and balances of these accounts (with information on receipts, debits from the accounts and their titles, as well as their senders and recipients, respectively), the loan agreements concluded (with information on the amount of the resulting liabilities, purposes for which they were granted and the manner of securing their repayment), as well as deposit agreements, safe deposit box agreements and their history, Treasury shares purchased through banks or bonds issued by the Treasury, and trading in these securities.
If, despite a proper request, the obliged entity, i.e. a bank, fails to provide the information within the prescribed period or provides it incompletely, the Head of the National Fiscal Administration or the head of the customs and tax office may, by way of a decision, impose on such entity a financial penalty of up to PLN 10,000.
The previous legislation allowed for the request of banking information on suspects, i.e. persons who have been formally charged. The planned amendment, however, will allow a request for access to bank information based on the full discretion of the tax authority. Contrary to the assurances of the Head of the National Fiscal Administration, who emphasizes that data provided by banks is protected by fiscal secrecy, which is regulated in detail by the provisions of the Tax Ordinance, the amendment will significantly increase the risk of abuse.
Suspect status no longer needed
From 1 July 2022, the scope of the above powers will be broader and will enable the national tax administration authorities to also request bank information on a natural person, a legal person or an organisational unit without legal personality or data on proxies of the bank account indicated in the request in the event that preparatory proceedings or explanatory activities are conducted in connection with acts committed within the scope of activity of a natural person, a legal person or an organisational unit without legal personality. In other words, banks will be obliged to provide the tax and revenue authorities with information on bank accounts also of individuals who will not have the status of suspects.
Due to the fact that the requests will also be able to apply to proxies for such accounts, the tax office will gain knowledge about settlements made through an account whose owner is different from the person subject to the request issued by the national tax administration authorities. The group of entities that may request bank information will be additionally expanded by adding the head of the tax office.
Changes not excluded?
When analysing the consequences of the changes introduced, it should be noted first of all that the previous legislation allowed for the request of banking information on suspects, i.e. persons who have been formally charged. The planned amendment, however, will allow a request for access to bank information based on the full discretion of the tax authority. Contrary to the assurances of the Head of the National Fiscal Administration, who emphasizes that data provided by banks is protected by fiscal secrecy, which is regulated in detail by the provisions of the Tax Ordinance, the amendment will significantly increase the risk of abuse. Citizens are rightly concerned about attempts to interfere in their privacy, as the tax authorities will receive a tool that will give them virtually unlimited access to taxpayers’ bank information.
This change has been very controversial from the beginning, which is proved by the fact that in official announcements the Ministry of Finance does not rule out further changes. We can only hope that they will be aimed at reducing the risk of discretionary requests for bank account data and its unjustified use and not at further interference in citizens’ privacy.
Author: Katarzyna Jessa, Barrister, Mediator