Ruling description

The Provincial Administrative Court (WSA) in Warsaw ruled in a judgment handed down on May 12, 2014 (case no. III SA/Wa 3204/13) that a protection right under a tax ruling accrues only if the taxpayer has complied with it. The legal successor of a target company may therefore succeed to a protection right under a tax ruling on condition that it was acquired by the target company (as a result of compliance with that ruling). As a result, if the consequences of the events contemplated in the tax ruling obtained by the target company occur after a merger, the acquiring company will be entitled to the protection accruing to the benefit of the target company. Things change if the facts of the case (not the fiscal consequences of the pre-merger situation discussed in the ruling) occur after a merger. In the opinion of the tax authority – approved by the WSA in Warsaw in the ruling under discussion – one cannot refer in this context to the protection of a legal successor, in that there was no ruling issued with regard to a post-merger situation. The legal successor therefore could not acquire the protection right by way of succession.


The judgment under discussion applies to companies which, as a result of a merger or transformation, have become successors to rights and obligations under tax law and comply with tax rulings issued for the benefit of their legal predecessors in relation to constant or recurring facts that occurred after a merger or transformation.

The administrative courts are out on the issue of the scope of succession to the protection right under a tax ruling. In the judgment under consideration, the WSA in Warsaw presented a view which differs from that endorsed in its judgment of March 4, 2014 (case no. III SA/Wa 2560/13) and held that a tax ruling obtained prior to an event triggering tax succession protects the taxpayer only to the extent of the fiscal consequences of facts that occurred prior to that event. Consequently, even if the legal successor deals with facts that are identical to those contemplated in the tax ruling obtained by its predecessor, it is no longer entitled to the protection provided for in the Tax Ordinance. This opinion, which is adverse to taxpayers, is also presented by the tax authorities in their rulings on the subject.

Thus, for the avoidance of doubt, companies which carried out restructurings subject to fiscal succession and which have complied with the tax rulings obtained by their legal predecessors in continuing the activities of the target (transformed) company, should file applications for tax rulings to confirm the fiscal consequences set out in the rulings obtained by their predecessors. As regards settlements of account based on rulings issued for the benefit of their predecessors, we recommend that, until such time as they obtain tax rulings on their own, taxpayers work out appropriate argumentation or obtain a tax opinion confirming the correctness of the earlier rulings, so as to minimize the risk of their liability as successors.