The Supreme Court, in its ruling dated March 17, 2016 (case file no. V CSK 413/15), precluded the taxpayer from seeking compensation in a situation in which the taxpayer failed to apply for a tax overpayment before the lapse of the statute of limitation.

The taxpayer, in order to confirm that specific expenses may be treated as costs of earnings, applied for an individual tax ruling concerning PIT. In response, the head of the tax chamber supported the stance adopted by the taxpayer. In order to comply with the tax ruling, it was necessary to submit the corrected tax returns for the years 2006-2007 and apply for the tax overpayment. Earlier, i.e. in March 2008, the Tax Inspection Office (Polish acronym: “UKS”) initiated the tax audit with respect to PIT for the years 2006-2007 and the option to correct the tax returns was temporarily suspended. The UKS supported the stance upheld in the individual tax ruling and in April 2009 presented the results of the audit. The final correction and the motion for the PIT overpayment for the year 2006 was submitted in April 2013. The head of the tax office, however, refused to initiate proceedings concerning the tax overpayment and indicated that the statute of limitations of the tax liability lapsed on December 31, 2012.The taxpayer brought action against the UKS and requested compensation. The taxpayer claimed that the tardiness of UKS and excessively long audit procedure made it impossible for the taxpayer to seek a refund of the tax overpayment.

The courts of the first and the second instance, however, did not support the stance taken by the taxpayer and the case was brought before the Supreme Court which dismissed the final appeal. The Supreme Court found that the taxpayer did not prove any loss in assets (damage) which would justify the compensatory claim. In addition, it was not proven that the authority acted in a dilatory manner.


The stance adopted by the courts is by no means surprising. The taxpayer was able to file for the overpaid tax, however, did do so too late. Furthermore, the tax ruling does not constitute grounds to determine and refund the tax overpayment. There was also no decision handed down in the discussed case with respect to the tax assessment.

The compensatory procedure aims at compensation for damage incurred by the unlawful actions of the administrative authorities. That aim, however, does not extend to the simple continuation of a tax dispute. It is necessary to prove that unlawful actions had been taken by the tax authority, the occurrence of damage and the causal link between the event causing damage and the damage itself. The case in question lacks these preconditions.