What's new at DZP?
There has been a breakthrough in a long-standing dispute with tax authorities over taxation of income from practicing a sport in which DZP’s Tax Practice represented a professional athlete.
On 22 June, the extended bench of the Supreme Administrative Court (SAC) issued resolution no. II FPS 1/15 in which it confirmed that where a taxpayer obtains income from practicing a sport while statutory prerequisites of a non-agricultural business activity are met, income obtained by the taxpayer in such conditions should be treated as income from non-agricultural business activity. Thus, an athlete who carries on business may tax his income from practicing a sport as income from non-agricultural business activity.
Such resolution is the product of a long-standing dispute between our client, a professional speedway rider, with tax authorities that challenged his right to classify his income from practicing a sport as originating from business activity and apply flat tax to it.
Tax authorities of both instances and the Voivodship Administrative Court in Bydgoszcz maintained that as income from practicing a sport was included on the list of incomes from activity pursued personally, then under the applicable laws it could not be classified as income from non-agricultural business activity even if the taxpayer obtained such income in conditions that had features of such activity. Significantly, such disadvantageous position was commonly accepted by administrative courts, including the SAC, which largely impeded defending rights and interests of the taxpayer.
It was only the SAC bench composed of seven judges that abandoned the existing negative ruling practice because it saw arguments for the possibility of taxing income of professional athletes conducting business activity as income from non-agricultural business activity.
The above resolution undoubtedly marks a fundamental break and is crucial for athletes whom administrative courts denied the right to tax their income in accordance with principles applicable to business activity (including with flat tax). The resolution also confirms that it is worth defending one’s rights and interests until the end, using the appeal measures available, even contrary to the existing negative ruling practice.
The client was advised by Artur Nowak, Partner, and Paweł Suchocki, Senior Tax Consultant from DZP.
From 25 May 2018 the General Data Protection Regulation (GDPR) applies in Poland and other European Union countries. We would therefore like to give you several details on the subject of how DZP processes personal data.
The administrator of the personal data is Domański Zakrzewski Palinka Sp.k. (“DZP”; address: Rondo ONZ 1, 00-124 Warszawa). Data are processed for contact purposes and to impart information on changes to provisions and authority practices and on other issues, including events concerning day-to-day legal, economic and cultural issues, inter alia, by sending DZP newsletters. The above is carried out on the basis of legitimate interests, i.e. in accordance with art. 6(1)(f) of the GDPR. Data can also be processed where necessary for the conclusion or performance of a contract and for compliance with a legal obligation to which DZP is subject, i.e. pursuant to art. 6(1)(b) and (c) of the GDPR. Data can be transferred to entities with whose help DZP achieves the indicated aims, including entities maintaining IT infrastructure. Giving data is voluntary and in contractual relations is a requirement for concluding and performing a contract. It is possible to object to data processing, request access to, rectification and erasure of personal data or restriction of processing and data portability. Data are kept until an objection is made, and in contractual relations – throughout the term of the contract and thereafter for a period specified in provisions on archiving and limitations period for claims. Anyone has the right to file a complaint with the President of the Personal Data Protection Office. Questions concerning privacy at DZP can be sent to DZP’s Data Protection Inspector, Macieja Maciejewskiego, at: firstname.lastname@example.org.
New rules on cookies: Domański Zakrzewski Palinka sp.k., as the service provider of the www.dzp.pl website, stores and accesses cookies, i.e. small text information fles sent by a web server and stored on your hard drive, or other data storage medium of a user, for the purposes of: proper functioning of the www.dzp.pl website, confguring the www.dzp.pl website, security and reliability of the www.dzp.pl website, session monitoring, providing advertisements, personalization of the displayed information to the user, or analysis, statistics, research and website trafc auditing.