There is a widespread belief that “money likes silence” and should not be talked about. Most people keep this secret from neighbours, friends or state authorities for fear of having their wealth judged. Keeping this secrecy is now harder than ever, especially before the authorities. Until now, only people who were suspects in criminal investigations could have their bank accounts examined by the tax authorities. The bank was not obliged to provide the state authorities with such information.
However, as of July 17th, 2022, the regulations amended by the Polish Order (Polski Ład) came into force. They have significantly changed this state of affairs. At the same time, the scope of the requested information can be extremely broad. That only raises further problems related to potential abuse by the tax office. Some time has passed since the amendment came into force and emotions have subsided. So, what is the current situation with regard to the tax authorities’ access to taxpayers’ accounts and what is the practice in their execution?
amendment to the National Fiscal Administration Act
The order outlined above has changed. The amendment to the National Fiscal Administration Act (ustawa o Krajowej Administracji Skarbowej) came into force on July 1st, 2022. From that moment on, the tax administration authorities (Head of the KAS, Head of the Customs and Fiscal Office, as well as the Head of the Tax Office) have the right to request the bank to prepare and transmit information concerning a natural person, a legal person or an organisational unit without legal personality or the data of the proxies indicated in the request for bank accounts.
This right is exercised in the event that pre-trial proceedings or investigative actions are carried out in connection with acts committed within the scope of activity of a natural person, legal person or organisational unit without legal personality. It should be emphasised that the interpretation of the aforementioned provision dictates that it is any activity and not only business activity (in the case of a natural person). The personal scope of application of the cited provision is therefore extremely broad.
How is the amendment justified? The legislator explains the reasons for the replacement of the word “suspect” by “natural person”. It was due to the fact that at the early stage of criminal fiscal proceedings there is no suspect yet. They only acquire the status of a suspect when they are charged with a crime. In order to raise criminal charges, law enforcement authorities must have data sufficiently substantiating that the crime has been committed.
Taxpayers’ accounts under the magnifying glass
Given the frequent cases of instrumental initiation of criminal fiscal proceedings, the amendments to the KAS Act can be treated as unequivocally necessary for the tax authorities. On the other hand, they create many dangers and raise doubts in terms of taxpayers’ privacy and freedom.
Easier accessibility to individuals’ bank accounts can undoubtedly translate into the number of bank accounts blockages by tax officials. Performing this action, on the one hand, helps the tax authorities in the subsequent enforcement of public debts. On the other hand however, it can paralyse business activity and sometimes lead to its collapse. Therefore, it should be used prudently. Especially given the number of criminal tax proceedings that end in discontinuation.
It should be noted that the tax office now has broad powers with regard to the blocking of accounts. As it can be seen in the statistics, they are eager to use them. The possibility of blocking an account of a person against whom no charges have been brought raises many legal questions. First and foremost, it violates the right to the protection of private life as set out in the Constitution. It is also difficult to accept that the provision introduced is consistent with Article 51 (2) of the Polish Constitution. It stipulates that: Public authorities may not obtain, collect and make available information about citizens other than that necessary in a democratic state governed by the rule of law.
The move towards fiscalism does indeed work in favour of the State Treasury. Especially in cases where the seizure turns out later to be justified. However, it is hard to see it as proportionate to the resulting violations, including the potential violation of the Constitution. The authorities are, after all, in a position to carry out criminal fiscal proceedings efficiently. It would seem that it should translate into no need for such legislative solutions.
Full article is available in Polish here.