Dentons' Tax Litigation team within the Tax practice in Warsaw has successfully represented Porsche Inter Auto Polska Sp. z o.o. in multiple cases before the Provincial Administrative Court in Warsaw and the Supreme Administrative Court concerning excise taxation on intra-Community acquisitions (ICA) of passenger cars. Both these courts agreed with Dentons' argumentation that taxpayers are entitled to make adjustments to the excise tax base.

Porsche Inter Auto Polska regularly carries out ICAs of passenger cars on which it pays excise tax in Poland. When the company meets certain annual sales targets, it is granted discounts on the cars it has purchased, and as a result, receives correcting invoices reducing the originally charged selling price. Dentons represented the client in a dispute with the tax authority concerning whether or not the post-transaction discount it received should affect the excise tax base for ICAs of passenger cars.

Tax authorities have, for many years, consistently ruled that taxpayers cannot reduce the tax base and recover any overpaid excise tax even if they are granted an after-sale discount. The administrative courts have been unwavering in upholding the tax authorities’ decisions in this regard since 2015. Dentons' Tax Litigation team disagreed with the interpretations presented in the case law. Acting for the client, they argued in court that in light of both the provisions of the Excise Tax Act and the general principles of tax law, taxpayers should have the right to adjust the excise tax base for ICAs of passenger cars.  They pointed out that the tax base refers to "the amount the taxpayer is required to pay”, which in this case, is the price of the car that the parties ultimately agreed to.

“Where the price includes discounts contingent on the fulfillment of certain conditions set out by the parties, such discounts impact the tax base, even if the conditions were fulfilled and the discounts were granted after the tax liability arose," observed Aleksandra Rutkowska, Counsel and Head of Tax Litigation team within the Tax practice. "Although the Excise Tax Act does not specifically regulate this issue, the absence of specific regulations cannot in itself be seen as grounds for denying taxpayers the right to adjust the tax base."

On May 12 2022, the Provincial Administrative Court in Warsaw handed down landmark judgments in 20 cases, agreeing with the argumentation presented by Dentons.  It ruled in favor of Porsche Inter Auto Polska and confirmed that it is entitled to adjust the excise tax base for ICAs of passenger cars. These judgments are yet to become final and non-appealable. Then, on January 12, 2023, Dentons represented the client in eight cases before the Supreme Administrative Court which overturned earlier judgments, issued by the Provincial Administrative Court in Warsaw in 2018, concerning earlier periods together with the relevant decisions of the tax authorities of both instances, thereby upholding the reversal of the jurisprudential position favorable to taxpayers.

While these cases concerned ICAs of passenger cars, the reasoning presented by Dentons also applies to the taxation of imports and  first sales of passenger cars in the country. Thus, the cited rulings are of significance for the entire automotive industry.

Aleksandra Rutkowska (counsel) and Aleksander Brzozowski (senior associate) represented Porsche Inter Auto Polska in all the cases heard by the Provincial Administrative Court in Warsaw and the Supreme Administrative Court.

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