According to the Tax Ordinance Act, the tax authority (Minister of Finance) is obliged to issue an interpretation of tax law provisions within three months from receipt of a motion in this respect. This rule is subject to exceptions. The Minister may extend that period of time for example due to reasons on the part of an applicant or due to reasons occurring irrespectively from the acts of the tax authority, or when the applicant did not complete description of the factual state in spite of request of the tax authority.

The time limit for issuing interpretation of tax law provisions is of vital importance. If it is not met, the legal fiction that the interpretation has been issued and that it is in line with the motion of a taxpayer comes in force (so called ‘tacit interpretation’).

It is often that the time limit in question is exceeded. In order to avoid negative legal consequences of violating three months time limit, the tax authorities tended to find out ways of circumventing the rules of calculating that period. There occurred a concept that in order to meet criteria prescribed by the law, it was sufficient just to issue interpretation of tax law provisions within three months from receipt of the request. Consequently, the time required for effective delivery of the interpretation to the applicant should not be taken into account, when calculating three months period. In other words, the sole fact of issuing and signing the interpretation, if it was done within three months from receipt of the motion, was used to be treated as meeting requirements of the law as to the time limits.

The concept mentioned above was even approved by the Supreme Administrative Court. It triggered off wide comments and discussions in jurisprudence. This effect was clearly inevitable, because the interpretation of tax law provisions is regarded as an act of administrative authority, which may create certain rights or certain obligations on the part of the taxpayer. Therefore all legal (procedural) effects of that act should be connected only with the fact of its delivery to the addressee, in opposition to the sole fact of issuing and signing the act of administrative authority. The author of the present article is of the opinion that the concept of tax authorities under consideration is incorrect. The reason for that is that the taxpayer has no influence on circulation of documentation within the tax authorities and therefore it is unpredictable when the documents will be passed with a purpose of their delivery to the taxpayer. The fact of existence of some period of time between issuing and delivery of the interpretation shouldn’t be considered to the disadvantage of the taxpayer. Preparation of the interpretation itself is of no practical effects to the taxpayer (apart from the severe outcome of the fact of issuing of that act) until the taxpayer is allowed to get acquainted with the contents of the interpretation. Therefore, only the fact of delivery of the interpretation may be regarded as right and correct activity, which ends the administrative proceeding in certain case.

 

Queries and doubts which occurred in connection with interpretation of the term “issuing”, should be cleared out by the judgement of the Supreme Administrative Court dated 4 November 2008 (file no.: I FPS 2/08). The court expressed an opinion that the interpretation of tax law provisions had to be delivered. The court referred to the functional interpretation of the laws and to the interpretation based on the system of law, prioritising protection of the taxpayer.