For the repayment of tax liabilities owed by companies, tax authorities have the right to demand money from taxpayer’s business partners who have liabilities due to deliveries, works and services. This allows Article 89 of the code on administrative enforcement proceedings. In such cases additional obligations are imposed on taxpayer’s business partners – temporarily suspend remittances, to submit declarations and to calculate the default interest. Failure to comply with these obligations may result in a large penalties. A distraint occurs by a notification of the business partner regarding the distraint of receivables. This imposes certain obligations at the business partner. In particular, he/she has to respond to the tax authority. He/she submits a declaration whether he/she will acknowledge and pay the distrained receivable that is in an administrative enforcement proceeding. Otherwise, he/she has to justify why he/she will not acknowledge and pay the receivables, or why, or at which court, or authority, are any proceedings regarding the distraint receivables. This declarations must be submitted within 7 days after receipt of the notification.
Furthermore, the business partner is also obligated to make any payments to the taxpayer, up to the amount equal to the claim asserted, including default interest and enforcement costs. The total amount or a partial amount, depending on the amount of his/her liabilities to his/her business partner, must be paid to the tax authority. Business partners who are legally required to keep accounts have to calculate by themselves the amount of the default interest. The tax authority mentions in its notification on the distraint of receivables, the amount of the default interest until the date of this notification. The additional default interest, due to the time period from the date of the notification until the date of payment of the distraint receivables to the tax authority, must be calculated by the relevant business partners. If the business partner effects the payment through his bank account he/she has to calculate the default interest until the date of debiting the bank account with the payment. Type and amount of the default interest should be submitted with the above mentioned declaration.
The tax authority has the right to verify the regularity of the payment of distraint receivables, for example, if it is uncertain whether the refusal to pay was actually justified. This verification process will be completed by a protocol.
A business partner who acts negligently related to the payment of distraint receivables may be subject to large fines. This financial penalty can be up to PLN 3,800.00, if he/she does not duly fulfill the obligations imposed upon him/her. Article 168 (e) of the code on administrative enforcement proceedings provides the basis for punishment. The financial penalty shall be determined by a document. You will have the opportunity to appeal the decision.
Source: Gazeta Podatkowa, 17th November, 2014