II FSK 1352/22 - Judgment

Judgment date 2023-07-25

Date of receipt 2022-11-03

Sąd Naczelny Sąd Administracyjny (Supreme Administrative Court)

Judges Alicja Polańska/Maciej Jaśniewicz/Tomasz Zborzyński /chairman rapporteur/.

Symbol with description 6113 Corporate income tax

Subject Headings Corporate income tax

Reference number I SA/Po 360/22

Body appealed against Director of the Tax Administration Chamber

Content of the result Cassation appeals dismissed

Sentence

The Supreme Administrative Court, composed of: Chairman - Judge NSA Tomasz Zborzyński (Rapporteur), Judge NSA Maciej Jaśniewicz, Judge WSA del. Alicja Polańska, , Protokolanta Adrianna Siniarska, having examined, on 25 July 2023 at a hearing in the Financial Chamber, the cassation appeals of the Director of the Tax Administration Chamber in Poznań and K. S.A. with its registered office in P. against the judgment of the Provincial Administrative Court in Poznań of 1 July 2022, ref. no. I SA/Po 360/22 in the case filed by K. S.A. with its registered office in P. against the decision of the Director of the Tax Administration Chamber in Poznań of 24 February 2022, ref. no. [...] on corporate income tax for the period from 1 April 2012 to 31 March 2013 1) dismisses both cassation appeals, 2) waives in full the award of the costs of the cassation proceedings in favour of each party.

Justification

Case No. II FSK 1352/22

Justification

In the contested judgment, the Provincial Administrative Court in Poznań upheld the complaint of Spółka Akcyjna K. with its registered office in P. and repealed the decision of the Director of the Tax Administration Chamber in Poznań and the preceding decision of the Head of the [...] Customs and Fiscal Office in P. regarding corporate income tax for the period from 1 April 2012 to 31 March 2013.

The state of the case was presented by the Court as follows:

The Head of the [...] Customs and Fiscal Office in P., by decision of 30.06.2020, determined the applicant's corporate income tax liability for the period from 1.04.2012 to 31.03.2013 at PLN 77,242,899. He established that the applicant to a subsidiary - a limited partnership established in 2009. K. S.A. limited partnership. - made an in-kind contribution in the form of previously created or acquired and depreciated trademark protection rights for individual beer brands, and the limited partnership reciprocally granted the applicant a licence to use these trademarks. The limited partnership made depreciation write-offs on these intangible assets, which - due to the lack of legal personality of the partnership - pursuant to Article 5 of the Corporate Income Tax Act of 15.02.1992 (Journal of Laws of 2011 No. 74, item 397 as amended, hereinafter: u.p.d.o.p.), were recognised as tax deductible costs directly by the applicant, in proportion to its share in the profits of the limited partnership. The tax authority held that there were links between the parties to the licence agreement, as stipulated in Article 11 of the u.p.d.o.p., which resulted in transactions that did not correspond to economic rationality and which resulted in the recognition by the applicant of tax deductible costs in the form of depreciation allowances in the amount of PLN 485,252,006 in breach of Article 16b(1)(6) of the u.p.d.o.p.

The Director of the Tax Administration Chamber in Poznań, in a decision of 24.02.2022, upheld the decision of the Head of the Customs and Fiscal Office, stating that the applicant's tax liability was not time-barred, as the course of the limitation period had been suspended pursuant to Article 70 § 6(1) of the Act of 29.08.1997. - Tax Ordinance (Journal of Laws of 2018, item 800, as amended, hereinafter: O.p.) as a result of the delivery to the applicant on 19.11.2018 of a notice on the commencement of criminal and fiscal proceedings, however, due to the significant time difference between the date of the commencement of the investigation (12.10.2018) and the date of expiry of the limitation period for the tax liability (31. 12.2018), the large amount of tax evasion found and a number of procedural steps taken during the investigation, the initiation of this investigation was not a sham aimed at preventing the applicant's tax liability from becoming time-barred. As the role of the limited partnership was limited to the administration of trademark rights, it was not capable of exercising any rights and obligations arising from the licence agreements; therefore, the prerequisites listed in Article 11(1)(1) to (3), (4)(1) to (2), (5) and (5a) of the u.p.d.o.p. were met, allowing the applicant's income to be determined without regard to the conditions arising from those agreements.

The applicant could not rely on the individual interpretations obtained, as they were issued on the basis of a description of future events that did not present circumstances that had actually occurred and that were material to the correctness of the legal assessment; in particular, they did not indicate that the royalties received by the limited partnership would revert to the limited partner (the applicant) without constituting a permanent benefit for the licensor, nor did they describe the planned repurchase of trademark protection rights from the limited partnership's legal successor.

In its action against that decision, the applicant complained that the tax liability was time-barred as a result of the failure to suspend the running of the limitation period due to the instrumental initiation of criminal tax proceedings, the unjustified refusal to recognise as tax deductible costs for the applicant the depreciation write-downs on protective rights to trademarks made by the limited partnership in proportion to the applicant's share in the limited partnership's profit, to regard the provisions on transaction prices as constituting an anti-avoidance clause permitting an assessment in that regard of the transaction for the grant of a licence to use trade marks and, consequently, to disregard the effects of that transaction or to apply a mechanism for its recharacterisation, and to disregard the protective effects arising for the applicant from the individual interpretations issued at its request.

Justifying the upholding of the action and the annulment, pursuant to Article 145 § 1 point 1(a) and (c) in connection with Article 135 of the Act of 30.08.2002. - Law on Proceedings before Administrative Courts (Journal of Laws 2022, item 329, as amended, hereinafter: P.p.s.a.) of both the appealed decision and the preceding decision of the tax authority of first instance, the Provincial Administrative Court in Poznań referred to the indications contained in the resolution of the Supreme Administrative Court of 24.05.2021. (I FPS 1/21) and stated that the appealed decision, in violation of Article 210 § 4 in connection with Article 121 § 1, Article 124, Article 70 § 6 point 1 and Article 70c of O.p.p., does not contain sufficient justification that the initiation of criminal fiscal proceedings did not lead to the instrumental use of this legal institution to suspend the running of the limitation period of the tax liability, despite the limitation of the preparatory proceedings exclusively to formal-administrative actions, as well as the temporal coincidence of its initiation with the limitation period of the liability. In addition, Article 11(1) of the u.p.d.o.p. cited in the decision only entitles to adjust the amount of royalties, but does not provide a basis for a different assessment of the nature of the controlled transactions by recognising that instead of a licence agreement for the use of the right to trademarks, a contract for the provision of trademark administration services has been concluded; such powers were obtained by the tax authorities only as of 1.01.2019 by virtue of the newly introduced Article 11c(4) of the u.p.d.o.p., whereby the transaction recharacterisation mechanism may only be applied to income earned after that date. Tax optimisation with the use of legal instruments may be an element of planning economic activity, and therefore the questioning of the optimisation scheme applied by the taxpayer must have a clear legal basis. Meanwhile, on the date of the legal actions challenged by the tax authorities by the applicant, neither the abuse of rights clause nor the anti-avoidance clause were in force, so neither of them could be effectively applied; neither could the tax authorities' reference to Article 15(1) u.p.d.o.p. serve to achieve the above effect. Consequently, the conclusion of the tax authorities that the legal relationship justifying the incurrence of expenses recognised as tax deductible costs is an agreement for the provision of trademark administration services is in contradiction with the position expressed simultaneously by the authorities that they do not question the validity of legal transactions resulting in the transfer of rights to trademarks to the limited partnership and, subsequently, the granting by the partnership of a licence to use the trademarks. It is also incorrect for the tax authorities to interpret Article 11(1) and (4) of the u.p.d.o.p. on the basis of the 2017 OECD Guidelines introducing the so-called DEMPE concept, as they do not constitute a source of law and the said concept was not known during the period in question. Notwithstanding the above, the tax authorities unjustifiably estimated the applicant's income using the net transaction margin method, while other methods listed in Article 11(2) u.p.d.o.p. took precedence.

The allegation of a violation of Article 191 of the O.p.p. is also well-founded, with the reservation, however, that the reclassification of the applicant's legal actions is not so much the result of a defective assessment of evidence as of a particular interpretation and manner of application of substantive law provisions in the form of Article 11(1) and (4) of the u.p.d.o.p. The consequence of the violation of substantive law, however, is the legitimacy of the allegations of a violation of Article 120 and Article 121(1) of the O.p.p.

On the other hand, the Provincial Administrative Court shared the assessment of the tax authorities as to the ineffectiveness of the reliance of the appellant on the protection stemming from the received individual interpretations of the provisions of the tax law (Article 14m § 1 point 1 in connection with Article 14k § 1 of the P.C.), as the future events being the subject of the interpretations did not correspond to the subject of the decision in the present case.

Cassation appeals against the above judgment were filed by both parties.

The Director of the Chamber of Fiscal Administration in Poznań requested that the contested judgment be reversed in its entirety and the complaint be dismissed, or alternatively that the case be referred to the Provincial Administrative Court in Poznań for re-examination, and that the costs of the proceedings be awarded.

Pursuant to Article 174(2) of the P.p.s.a., he alleged infringement of:

1. Article 210 § 4 and Article 121 § 1 in connection with Article 70 § 1 and Article 70 § 6 item 1 of the P.p. by reversing the correct decisions of both instances as a result of assuming that the commencement of proceedings in the tax offence case was of a sham character and served only to suspend the running of the limitation period, which violated the principle of trust in the state authorities, the grounds of the decision do not contain sufficient information concerning the limitation period and the assessment of the instrumentality of the commencement of the penal-fiscal procedure, and the General Court 'lacks the power to examine this area on its own' and 'is not in a position to carry out a binding assessment of the conditions' for the effectiveness of the suspension of the limitation period, due to the laconic nature of the grounds of the decision and the lack of details relating to the subject matter of the criminal and penal proceedings;

2. Articles 191, 120 and 121(1) of the P.C.P. by reversing the tax authority's legal rulings on the ground of a breach of the aforementioned rules of evidence in conjunction with Articles 11(1) and (4) of the u.p.d.o.p. and holding that the tax authority did not correct the amount of royalties and the marketability of the transaction, but "erroneously disregarded the licence agreement" and reclassified the legal relationship on the basis of which the entity incurred the expense, which corresponds to the hypothesis of the standard of Article 11c(4) of the u.p.d.o.p. of 2019. - which procedural errors of the Provincial Administrative Court in the assessment of the legality of the suspension of the running of the limitation period and the legal basis of the decision resulted in the case being declared expired and unjustifiably recharacterised.

In addition, pursuant to Article 174(1) of the P.p.s.a., he alleged a violation of:

3. Article 70(6)(1) of the P.p.s.a. by its non-application in view of erroneous findings as to the non-existence of the prerequisites for suspending the running of the limitation period due to instrumental initiation of criminal fiscal proceedings, laconic justification of the decision and lack of possibility for the Court to "independently examine this state of affairs" and control the legality of the decision in this respect - and, as a result, acknowledging that the factual state of the case does not correspond to the hypothesis of this norm;

4. Article 11(1), (2), (3) and (9) u.p.d.o.p. and § 3(2a), § 4(1) and (4), § 15(1) and § 18(1) of the Regulation of the Minister of Finance of 10.09.2009 on the manner and procedure for determining the income of legal persons by way of estimation and the manner and procedure for eliminating double taxation of legal persons in the case of adjustment of profits of related entities (Dz. U. No. 160, item 1268) by misinterpretation and the related failure to apply them as a result of assuming that this norm does not cover the assessment of the terms of transactions when recognising their validity and estimating income using the net transaction margin method.

K. S.A., in its cassation appeal, requested that the appealed judgment be overturned in its entirety and that the appeal be heard and the appealed decision and the preceding decision of the tax authority of first instance be annulled, or that the case be referred back to it for reconsideration, and that the costs of the proceedings be awarded.

Pursuant to Article 174(2) of the P.p.s.a., it alleged infringement of:

1. Articles 3(1), 141(4), 133(1) and 145(1)(c) of the P.p.s.a. in conjunction with Article 14b(3) and Article 191 of the O.p. by defective review of the contested decision and by expressing, in the grounds for the judgment, a premature and unfounded legal assessment as regards the refusal to grant the applicant the protection resulting from compliance with the interpretation and to accept the view of the tax authority that the future state of affairs presented by the applicant in its requests for an interpretation "to a significant extent did not present all the factual circumstances established in the course of the audit proceedings conducted";

2. Article 141(4) of the P.p.s.a. by defective drafting of the grounds of the judgment as regards the refusal to grant protection to the appellant on account of compliance with the interpretation, which amounted to acceptance of the position of the tax authority without presentation of the circumstances which make it possible to follow the Court's reasoning.

In addition, on the basis of Article 174(1) of the P.p.s.a., the appellant alleged a violation of Article 14k(1) and Article 14m(1), (2)(1) and (3) of the P.C. by their incorrect application (non-application) and acceptance of the refusal to grant the appellant protection resulting from compliance with the interpretation.

In justification of the cassation appeal, the appellant argued that individual interpretations issued at its request confirmed that it would not be subject to tax liability if rights to trademarks were contributed to a limited partnership in the form of an in-kind contribution, that the initial value of the subject of the in-kind contribution should be the value established by the partners as at the date of the contribution, and that the appellant would be entitled to recognise tax deductible costs in the form of depreciation write-offs on the rights to trademarks introduced to the assets of the limited partnership.

The parties filed replies to the opposing parties' cassation appeals, requesting that they be dismissed and the costs of the proceedings be awarded, and the applicant additionally filed a pleading containing a selection of administrative court rulings in similar cases.

The Supreme Administrative Court considered the following:

Neither of the cassation appeals has justified grounds.

Of fundamental importance for the assessment of the legitimacy of the decision made by the Provincial Administrative Court in Poznań is the determination of whether, in the tax period covered by the decision complained of by the taxpayer, there were legal grounds for redefining legal actions made by the taxpayer and its related entities as a result of the determination of the economic (economic) irrationality of these actions with the simultaneous determination of the fact that they caused tax consequences favourable for the taxpayer. It is therefore a question of establishing the existence of abuse of rights or anti-avoidance clauses in the legal order at that time, the essence of which is the possibility for the tax authorities to derive the consequences inherent in a disguised legal action, and in particular to disregard the tax consequences of legal actions aimed mainly or exclusively at reducing the tax base. Provisions authorising such actions were derogated by the Constitutional Tribunal's judgment of 11.05.2004 (K 4/03), and later introduced (art. 119a § 1 and § 2 O.p.), allowing to replace the effects of an artificial legal action, the main or one of the main purposes of which was to achieve a tax benefit, with the effects derived from a proper action, are in force only from 15. 07.2016; the possibility of determining the taxpayer's income or loss without taking into account the economically irrational transaction undertaken by related parties (Article 11c(4) u.p.d.o.p.), came into effect even later, as of 1.01.2019.

The tax authorities, in finding that the applicant had not in fact made an in-kind contribution of trademark rights to the limited partnership, but had merely entrusted that partnership with the duty to administer the marks, referred to Article 11(1) of the u.p.d.o.p. (as expressed in the 2011 consolidated text. ), by virtue of which the tax authorities could determine the taxpayer's income and the tax due without taking into account the conditions established or imposed as a result of the links between the contracting entities, with the income to be determined by way of an estimate, using the methods described in paragraphs 2 and 3 of Article 11 u.p.d.o.p. However, these are not provisions creating abuse of rights or anti-avoidance clauses, as they only allow for a different determination of transaction (transfer) prices. The notion of 'transaction price' is legally defined in Article 3(10) of the I.P.C., which, in the wording relevant to the tax period examined in the case, stipulated that it is the price of the subject of a transaction concluded between related parties. Thus, the essence of the legal institution regulated in Article 11 of the u.p.d.o.p. is not the omission of the legal effects of legal transactions performed by the taxpayer or a different legal definition of those transactions, but the determination of their economic effect expressed in the transaction price, with the omission of the impact of institutional links between counterparties (cf. judgments of the Supreme Administrative Court: of 18.11.2020, II FSK 1949/18 and of 9.12.2021, II FSK 2360/20). It is, therefore, a legal institution with strictly defined characteristics and capable of exerting only the effects provided for in the provisions defining it. Meanwhile, the application of any provisions allowing the tax authorities to interfere in the legal relations freely shaped by taxpayers must be strictly limited and restricted only to the premises defined in these provisions, as they are of a highly interferential nature. Therefore, any broadening interpretation of them, as a result of which legal sanction could be obtained by interference of public administration bodies going further than it results from the grammatical meaning of the words and phrases used in the provisions establishing such powers, is unacceptable.

Consequently, when deciding to interfere in the legal relations formed by the applicant, reaching a different interpretation of the content of the contracts (transactions) concluded by the applicant, the tax authorities should have an indisputable legal legitimacy. However, in the case at hand, the tax authorities redefined the applicant's legal transaction with the limited partnership, deriving tax consequences from another transaction, the content of which they themselves determined. Despite the fact that the contracting entities were related to each other and that the limited partnership was a subsidiary of the applicant, they did so by going beyond the authority arising from Article 11(1) of the u.p.d.o.p., which shaped the legal order in the tax period under assessment, a provision which authorised them only to define the conditions (prices) of these actions differently - and thus to replace the prices specified in the parties' agreements (transactions) with such prices that would correspond to hypothetical conditions (prices) agreed by unrelated entities. Failure to take into account the conditions arising from specific relationships, as provided for in Article 11(1) of the u.p.d.o.p., does not therefore mean that it is possible and permissible to replace the conditions arising from a specific legal transaction with conditions that may arise from another legal transaction that the taxpayer did not perform, but must be limited to a possible adjustment of the conditions of the legal transaction actually performed by the taxpayer.

Thus, the Provincial Administrative Court correctly concluded that Article 11(1) of the A.p.d.o.p., cited in the contested decision, entitled only to adjust the amount of licence dues constituting the effect of the contribution of rights to trademarks to a limited partnership and the granting by this partnership of a licence for the economic use of these trademarks by the applicant, but did not constitute grounds for a different assessment of the nature of the controlled transactions by recognising that instead of a licence agreement for the use of the right to trademarks, an agreement was concluded for the provision of services for the administration of these trademarks.

In this connection, it is impossible to share the allegation raised by the tax authority that Article 11(1), (2), (3) and (9) of the u.p.d.o.p. and § 3(2a), § 4(1) and (4), § 15(1) and § 18(1) of the implementing regulation of the Minister of Finance were infringed by misinterpretation and the related failure to apply them as a result of the assumption that this standard does not cover the assessment of the terms of transactions when recognising their validity and assessing revenue using the net transaction margin method. In fact, the essence of the tax decision taken was a different definition of the content of the legal transaction effected by the applicant and not merely an assessment of the terms (prices) of the transactions concluded by the related parties. Contrary to the assumption expressed in this plea, the tax authorities did not recognise the validity of the transaction, but assumed that, in fact, the applicant performed a legal act (carried out a transaction) with a different content and, consequently, with different legal effects, also in the sphere of tax law. The indication of Article 11(1), as well as Article 11(2), (3) and (9) of the u.p.d.o.p. as the legal basis for this decision, therefore indicates a misinterpretation of the first of them and a misapplication of the others. In fact, Article 11(1) of the A.p.d.o.p. did not contain a provision allowing a different determination of the content of the legal transaction made by the taxpayer, but only a different determination of the terms (prices) of the transaction resulting from that transaction; consequently, it was also incorrect to assess, pursuant to Article 11(2), (3) and (9) of the A.p.d.o.p., the income obtained by the appellant as a result of the legal transaction determined by the tax authorities and not from the transaction actually made by the appellant.

For the same reasons, the parallel plea alleging infringement of Articles 191, 120 and 121(1) of the P.C.P. by annulling the tax authority's legal rulings on the grounds of a breach of the aforementioned rules of evidence in conjunction with Articles 11(1) and 11(4) of the u.p.d.o.p. and holding that the tax authority did not correct the amount of royalties and the marketability of the transaction, but reclassified the legal relationship on the basis of which the entity incurred the expenditure, is also inappropriate. In fact, the assessment of the Provincial Administrative Court that such a construction of the tax authority's decision corresponds to the hypothesis of the 2019 standard of Article 11c(4) of the u.p.d.o.p. is correct, but there was no adequate legal basis for applying it to 2012/2013 and based on Article 11(1) and (4) of the u.p.d.o.p. in its then wording. Failure to take into account a transaction undertaken by related parties deemed economically irrational by the tax authority violated, in these circumstances, the provisions constituting the cassation grounds of the plea, as the Provincial Administrative Court reasonably found.

As regards the second basic controversy in the form of doubts as to the suspension of the running of the limitation period of the tax liability due to the commencement of penal-fiscal proceedings, the Supreme Administrative Court states that also in this aspect the arguments and the decision made by the Provincial Administrative Court are correct. The starting point in this case is the resolution of the Supreme Administrative Court of 24.05.2021. (I FPS 1/21), which determined that the assessment of the prerequisites for the application by tax authorities of Article 70 § 6(1) in connection with Article 70c O.p. falls within the scope of the case of judicial review of the legality of a decision. From the justification of this resolution, it further follows that these premises should be duly presented and argued in the justification of the decision, if this is important for demonstrating that the tax liability to which the decision relates is not time-barred. It must be emphasised that the resolution was issued prior to the date on which the final decision in the case at hand was issued, therefore, its premises and consequences should have been known to the tax authority issuing the decision.

Therefore, the Provincial Administrative Court reasonably assessed whether the justification of the appealed decision of the Director of the Tax Administration Chamber in Poznań contains the necessary elements that would allow to draw conclusions as to the actual, or only instrumental, prerequisites for the commencement of penal-fiscal proceedings and, as a consequence, to ascertain whether the running of the limitation period of the tax liability was suspended or whether this liability expired as a result of the limitation period. It is also difficult to dispute the conclusion that, although the significant value of the hypothetical tax loss and the nature and complexity of the structure of legal actions having such an effect could justify the suspicion that a penal fiscal offence had been committed, nevertheless the course of actions taken in preparatory proceedings, presented in the grounds for the decision, consisting only in registering the case, placing it under supervision, however, the course of action set out in the grounds for the decision, consisting merely in registering the case, placing it under supervision, transferring it to the competent authority in charge and, finally, suspending the proceedings pending the completion of the tax assessment proceedings and, subsequently, of the administrative court proceedings, does not indicate the true nature of the investigative activities carried out and justifies, at the very least, doubt as to whether the initiation of the criminal fiscal proceedings served any other real purpose apart from having the effect of suspending the running of the limitation period for the applicant's tax liability.

Therefore, there are no justified grounds for taking into account both the plea raised on the basis of Article 174(2) of the P.p.s.a. alleging a violation of Article 210 § 4 and Article 121 § 1 in connection with Article 70 § 1 and Article 70 § 6(1) of the O.p. by annulling the correct decisions of both instances as a result of assuming that the commencement of proceedings in the fiscal offence case was of a sham character and served only to suspend the running of the limitation period, which violated the principle of trust in the state authorities, and the justification of the decision does not contain sufficient information concerning the limitation period and the assessment of the instrumentality of the commencement of the criminal fiscal procedure, as well as the plea raised pursuant to Art. 174.1 P.p.s.a. the allegation of violation of Article 70 § 6.1 O.p. by its non-application due to incorrect findings as to the non-existence of prerequisites for suspending the running of the limitation period due to instrumental initiation of the penal-fiscal proceedings. Indeed, one has to agree with the assessment of the Provincial Administrative Court that the justification for the decision does not contain any argumentation allowing for a justified defence of the claim that preparatory proceedings were actually conducted, at least at the ad rem stage. Although the tax authority correctly observes that the conduct of those proceedings was no longer within its competence and that it had no influence on their course, that circumstance is of no legal significance, since fulfilment of the condition of the actual, and not merely illusory, initiation and conduct of those proceedings does not depend on which state authority conducted them; therefore, if the responsibility for the lack of visible progress in it lay with authorities other than the tax authorities, this has no bearing on the assessment of whether the initiation of these proceedings was genuine or merely instrumental, aimed at suspending the running of the limitation period for the tax liability. It is also correct that the Voivodship Administrative Court stated that it is not competent to independently determine and examine these circumstances, as they should be presented in the grounds for the decision, and only reviewed by the Court in terms of the legality of the process of determining them and the conclusions drawn from them. It should also be noted that the Provincial Administrative Court did not express a firm opinion as to the instrumentality of the initiation of criminal fiscal proceedings in the case, but only stated that the non-appearance of the premise of instrumentality was not justified in accordance with the requirements set out in Article 210 § 4 of the P.C.

The considerations carried out lead to the conclusion that none of the objections raised in the cassation appeal of the tax authority proved to be justified.

However, the charges raised in the Company's cassation appeal are not justified either.

Contrary to the assumption highlighted in the grounds of the applicant's cassation appeal, in the individual interpretations issued at its request, the applicant did not obtain confirmation of the legality of the entire optimisation construction, but only of the individual legal and factual actions constituting this construction, presented in isolation from the entire - at that time - planned future event. Such a fragmentation of the description of the future event does not comply with the obligation under Article 14b § 3 of the Code of Civil Procedure to provide an exhaustive account of the actual state of affairs or future event, and therefore - as a consequence - the applicant cannot rely on the legal protection provided under Article 14k § 1 or Article 14m § 1, § 2 (1) and § 3 of the Code of Civil Procedure.

For the same reasons, the applicant unjustifiably alleges a breach of Article 3(1), Article 141(4), Article 133(1) and Article 145(1)(1)(c) of the Code of Civil Procedure, in conjunction with Article 14b(3) and Article 191 of the Labour Code, through defective review of the contested decision and the expression in the grounds of the judgment of a premature and unfounded legal assessment as regards the refusal to grant the applicant the protection resulting from compliance with the interpretation. Contrary to the applicant's position, that assessment is neither premature nor unfounded, and its correctness is apparent even from the grounds of the Company's cassation appeal, which it does not appear to have noticed. In fact, it is one thing to state that there are no legal grounds for a different legal classification of actions taken by the appellant, or to disregard them and derive tax consequences from different actions, and quite another to obtain protection resulting from receipt of an individual interpretation of the provisions of tax law, conditioned, however, by acts of diligence and loyalty in presenting the factual state or future event by the interested party. It is in fact obvious that the future state of affairs presented by the appellant in its requests for interpretations did not, to a significant extent, present all of the factual circumstances established in the course of the control proceedings conducted; this obviousness is apparent from the juxtaposition of the theses of the interpretations obtained by the appellant with the factual state of the case already contained in the grounds of the cassation appeal.

The allegation that the Provincial Administrative Court violated Article 141(4) of the Administrative Court by defectively drafting the grounds for its judgment with regard to the refusal to grant protection to the appellant for complying with the interpretation is also unfounded. The fact that the Court shared the position of the tax authority in this respect must have led to its acceptance and this does not mean that the justification of the judgment is defective. Although the part of the reasoning devoted to this aspect of the case is rather brief, this did not make it difficult for the Cassation Court to follow the Court's reasoning, especially as the arguments supporting this reasoning are quite obvious.

In conclusion, the Supreme Administrative Court concludes that as neither of the cassation appeals has justified grounds, both cassation appeals are subject to dismissal pursuant to Article 184 of the P.p.s.a..

For these reasons, as each of the parties to the cassation proceedings both won and lost, the Supreme Administrative Court, pursuant to Article 207 § 2 of the P.p.s.a., waived in its entirety the mutual award of the reimbursement of the costs of the proceedings between the parties.

SWSA (del.) SNSA SNSA

Alicja Polańska Tomasz Zborzyński (spr.) Maciej Jaśniewicz