Wrongly accused taxpayers face uphill battle as Ministry opposes changes

The Finance Ministry is opposing changes to the tax code which allow taxpayers to receive full compensation for losses caused by erroneous decisions of tax authorities, even though the Constitutional Tribunal ruled that such compensation should be awarded. Under current regulations if a taxpayer incurs losses as a result of a tax decision, which is later overturned, he is only entitled to compensation covering the "actual" damage incurred and does not include compensation for foregone benefits the taxpayer could have obtained had the tax office not wrongly collected taxes. The most famous instances of such losses occurred when IT companies Optimus and JTT were wrongly charged millions in VAT taxes. Even though the courts eventually proved them right, the two companies suffered badly as a result of the decision of tax authorities, with JTT going bankrupt. In 2003, the Tribunal ruled that the regulation awarding only compensation for "actual" losses is against the Constitution. The Senate has just proposed a bill, which would offer full compensation, but the Finance Ministry convinced the Cabinet to voice a negative opinion on the draft. (Puls Biznesu, p.3) T.J.