"It's more than my job's worth"
Having been a little on the technical side in my last column, I thought I'd provide you with some light relief, turning my tax-related thoughts (albeit in a roundabout way) to the severe frustration or simple amusement (depending on whether you are involved directly or merely an onlooker) caused by officials who insist on going by the book or taking a literal approach to rules and regulations.
There was an interesting article in one of the papers last week. It seems the Wisła Kraków women's basketball team is looking for an experienced player. It also appears that it has someone specific in mind for the position. Better yet, the individual in question apparently wants the job. Terrific, so what's the problem, you ask? Well, the problem is the individual in question is an American. I bet you still can't see where the problem lies. We do, after all, see a number of foreigners on our local and national sports teams, not to mention generally in the community.
I'll let you in on the secret. The issue, of course, revolves around the need to obtain a work permit, or more specifically, the legislation put in place with regard to allowing a foreign national to accept paid work in Poland only when all reasonable efforts to find a local national for the position have been exhausted. Most authorities operate these provisions with a modicum of common sense. Some, however, prefer to use the "it's more than my job's worth" principle, as appears to be the case with regard to this unfortunate basketball team.
The American woman in question is already playing with the team and coming to the end of her trial period. In order to enter into a formal contract with her for a period longer than three months, the team has to obtain the appropriate work permit for her. To do this, it must prove that it has looked for a suitable alternative among the local labour force. An appropriate ad, therefore, has to be placed in the newspaper (and the local labour office/job centre) with very specific requirements about height, weight and sporting prowess. The problem is that even if someone were found to fit the job description, that individual wouldn't stand a chance of playing with the team as the place is firmly reserved for the already tried-and-tested American woman. It could, of course, consider inserting such specific personal requirements in the job ad, as eye colour, birth date, mother's maiden name, etc., that literally only the chosen candidate could satisfy. But is that entirely the point?
If you think this borders on the ridiculous, wait until you read what goes on in other countries and in other departments:
The "I'll act first and think later" official
I'll start with the unfortunate example of an official from the UK Inland Revenue who once sent a request for information to Mr. F. Smith (deceased), Croydon Crematorium. When the letter was eventually forwarded to Mr. Smith's widow, she unsurprisingly lodged an official complaint. Unfortunately, I have no information as to the outcome of the complaint procedure.
The "I know best 'cuz I'm the official" official
Back once again to Poland. We have a tale concerning non-deductible VAT on costs not being costs of earning revenues for corporate tax purposes. The provision in question does not refer, among others, to "that part of the costs which was not included in the costs of earning revenues as a result of exceeding norms in the understanding of the corporate income tax regulations."
Generally, this is considered to be relevant in relation, for example, to VAT on the costs of non-public representation and advertising in excess of 0.25% of income. But not so, it appears, if you are a tax inspector on a tax control. One such inspector questioned the deductibility of VAT on costs "exceeding the CIT norm." The taxpayer sensibly argued that the restriction on such deductibility did not concern norms exceeded in accordance with the CIT regulations:
Tax inspector: 0.25% is not a norm, but a limit!
Taxpayer: How do you know that?
Tax inspector: Because the word "norm" doesn't feature in the CIT regulations.
Taxpayer: And does the word "limit" feature?
Tax inspector: No, but it feels more like a limit than a norm to me.
Apparently this exchange took place with the assistance of a Polish-language dictionary, although I'm not certain if brains were engaged.
The "I have no idea what you are talking about, so if you say it's OK, then it's OK" official
There is another type of tax official who is happy to rely on your judgement and expertise in case of any doubt. Such an example was recently met in the Czech Tax Office in Prague. The case involved the annual tax reconciliation of Mr. T., a Czech national assigned to work in Slovakia under a split-contract arrangement. The tax office official was confused as to the figures declared, the foreign tax credits used and the small amount of tax being paid compared to the relatively large amount of income being declared. I won't bore you with the technical details, but after a lengthy discussion on the topic, the tax official's final question was, "Is the tax return correct then?" On receiving a positive response from the taxpayer's representative, the tax return was duly accepted, stamped and filed.
One word of warning, however. Whatever you may privately think of the authorities, beware of showing too much glee if you finally win an argument. It may not be over after all. Once again, I turn to the UK where a taxpayer emerged from a meeting with the Revenue in London's High Holborn. As soon as he got out on the street, he started jumping up and down with glee, not realising that the inspector was watching him from an upper window. He went straight from High Holborn into Deep Water.
There was an interesting article in one of the papers last week. It seems the Wisła Kraków women's basketball team is looking for an experienced player. It also appears that it has someone specific in mind for the position. Better yet, the individual in question apparently wants the job. Terrific, so what's the problem, you ask? Well, the problem is the individual in question is an American. I bet you still can't see where the problem lies. We do, after all, see a number of foreigners on our local and national sports teams, not to mention generally in the community.
I'll let you in on the secret. The issue, of course, revolves around the need to obtain a work permit, or more specifically, the legislation put in place with regard to allowing a foreign national to accept paid work in Poland only when all reasonable efforts to find a local national for the position have been exhausted. Most authorities operate these provisions with a modicum of common sense. Some, however, prefer to use the "it's more than my job's worth" principle, as appears to be the case with regard to this unfortunate basketball team.
The American woman in question is already playing with the team and coming to the end of her trial period. In order to enter into a formal contract with her for a period longer than three months, the team has to obtain the appropriate work permit for her. To do this, it must prove that it has looked for a suitable alternative among the local labour force. An appropriate ad, therefore, has to be placed in the newspaper (and the local labour office/job centre) with very specific requirements about height, weight and sporting prowess. The problem is that even if someone were found to fit the job description, that individual wouldn't stand a chance of playing with the team as the place is firmly reserved for the already tried-and-tested American woman. It could, of course, consider inserting such specific personal requirements in the job ad, as eye colour, birth date, mother's maiden name, etc., that literally only the chosen candidate could satisfy. But is that entirely the point?
If you think this borders on the ridiculous, wait until you read what goes on in other countries and in other departments:
The "I'll act first and think later" official
I'll start with the unfortunate example of an official from the UK Inland Revenue who once sent a request for information to Mr. F. Smith (deceased), Croydon Crematorium. When the letter was eventually forwarded to Mr. Smith's widow, she unsurprisingly lodged an official complaint. Unfortunately, I have no information as to the outcome of the complaint procedure.
The "I know best 'cuz I'm the official" official
Back once again to Poland. We have a tale concerning non-deductible VAT on costs not being costs of earning revenues for corporate tax purposes. The provision in question does not refer, among others, to "that part of the costs which was not included in the costs of earning revenues as a result of exceeding norms in the understanding of the corporate income tax regulations."
Generally, this is considered to be relevant in relation, for example, to VAT on the costs of non-public representation and advertising in excess of 0.25% of income. But not so, it appears, if you are a tax inspector on a tax control. One such inspector questioned the deductibility of VAT on costs "exceeding the CIT norm." The taxpayer sensibly argued that the restriction on such deductibility did not concern norms exceeded in accordance with the CIT regulations:
Tax inspector: 0.25% is not a norm, but a limit!
Taxpayer: How do you know that?
Tax inspector: Because the word "norm" doesn't feature in the CIT regulations.
Taxpayer: And does the word "limit" feature?
Tax inspector: No, but it feels more like a limit than a norm to me.
Apparently this exchange took place with the assistance of a Polish-language dictionary, although I'm not certain if brains were engaged.
The "I have no idea what you are talking about, so if you say it's OK, then it's OK" official
There is another type of tax official who is happy to rely on your judgement and expertise in case of any doubt. Such an example was recently met in the Czech Tax Office in Prague. The case involved the annual tax reconciliation of Mr. T., a Czech national assigned to work in Slovakia under a split-contract arrangement. The tax office official was confused as to the figures declared, the foreign tax credits used and the small amount of tax being paid compared to the relatively large amount of income being declared. I won't bore you with the technical details, but after a lengthy discussion on the topic, the tax official's final question was, "Is the tax return correct then?" On receiving a positive response from the taxpayer's representative, the tax return was duly accepted, stamped and filed.
One word of warning, however. Whatever you may privately think of the authorities, beware of showing too much glee if you finally win an argument. It may not be over after all. Once again, I turn to the UK where a taxpayer emerged from a meeting with the Revenue in London's High Holborn. As soon as he got out on the street, he started jumping up and down with glee, not realising that the inspector was watching him from an upper window. He went straight from High Holborn into Deep Water.
