In an age of ever-increasing access to information (widespread access to legislation, handbooks or various tax manuals), the answer to such a question seems to be heading in one direction. At the end of 2022, the capabilities of the ChatGPT chatbot were demonstrated, which was able to correctly answer simple questions in the field of taxation. However, when dealing with more complex issues, it provided generic or misleading information. Meanwhile, the practice is still such that simple tax questions are rare. Legal and tax problems are even becoming more complicated due to the multiplicity of inter-subject relations and the law’s regulation of more (including new) areas of life.

Solving tax problems on your own without professional support and only with the support of the aforementioned aids may eventually lead to negative consequences. This risk is mainly due to the high level of complexity of the tax law, its frequent changes and the lack of interpretive stability on the part of tax authorities and courts.

It is worth recalling that after the political changes of 1989, taxpayers were required to calculate their own tax. Thus, it requires every taxpayer (as well as payer and collector) to understand and apply the tax law, and to bear the consequences for these actions.

Who is a tax advisor?

Persons practicing this profession in Poland are most often graduates of law or economics faculties, who then passed a two-stage professional examination, completed an internship in tax consulting, took an oath and obtained an entry in the list of tax advisors. So the requirements are high, and the obligation to constantly improve qualifications, the professional secrecy in force and the rules of professional ethics are a guarantee of reliable services.

The tax consultant prepares opinions, provides advice and explanations on taxes (including customs and international taxes) and other public and legal dues (Social Security, KRUS, health insurance contributions). He also maintains or assists with bookkeeping, tax and other records for tax purposes. He can also act as an attorney in tax and control proceedings before tax authorities and in further proceedings before provincial administrative courts and the Supreme Administrative Court (possibility of drawing up a cassation complaint).

A tax advisor shall sign his name on the documentation and tax returns he prepares, indicating his registration number on the list of advisors, and in the event of an error he shall be liable for compensation for the damage caused. Moreover, he shall keep copies of the documents he prepares for 5 years, and in the event of an error he shall be liable for compensation for the damage caused.

When is the best time to enlist the help of a tax advisor?

Always, and the earlier, the better for the client. Asking a tax advisor for help at the planning stage of a particular investment, for example, offers the greatest opportunity to optimize costs. The tax consequences of the investment routes under consideration can then be pointed out. Although the choice of the “cheapest” route from a tax point of view will not necessarily be ultimately associated with the greatest profits, it is worthwhile to know in advance the costs of each of the possible solutions, assess their risks and choose the most convenient one.

Asking for help during or after the implementation of an investment will also make sense, for example, to conduct a tax audit or to help in the event of an audit by the tax authorities.

If these authorities detect irregularities on the part of the taxpayer, a tax advisor is needed to control the correct conduct of the tax authorities and possibly defend the taxpayer’s rights before the administrative courts.

Even at the final stage of a particular case, an advisor can help, by drafting a request for remission of tax arrears and instructing the taxpayer for the future.

What can a tax advisor offer an entrepreneur?

In view of the many record-keeping obligations incumbent on entrepreneurs (e.g., transfer pricing), professional support is even necessary. Often complex issues include those relating to indirect taxes (VAT, customs, excise), or, for example, transactions of an international nature (double taxation agreements concluded by Poland with individual countries).

Running a business also depends to a large extent on external funding and support (such as EU funds or other types of public assistance for entrepreneurs) – a tax advisor can also provide substantive assistance in applying for such financial support.

Entrepreneurs can consult with a tax consultant on all decisions regarding planned and ongoing investments, including the choice of a form of taxation. They can count on help in taking advantage of exemptions and tax benefits. In addition, the advisor can keep books and other tax records.

It is common practice for a tax advisor to apply for an individual interpretation on behalf of an entrepreneur, presenting questions about the business being carried out or the planned investment. These questions often concern, for example, the possibility of applying a lower VAT rate or including specific costs as tax-deductible expenses, thereby reducing tax. The issuance of a positive interpretation legally protects the entrepreneur in the event of an audit.

All these elements add up to a guarantee of safe development of the company can be an element of competitive advantage.

Tax consultant services for individuals

Also for individuals, the range of services offered by the tax consultant is wide. These individuals can count on professional assistance in the field of:

• income tax (including income earned abroad, tax residency, etc.),
• tax on inheritances and donations,
• tax on civil law transactions (to which many activities are subject, such as the purchase of a car),
• employee, contribution or pension issues (e.g., for people who already receive a pension but are still working),
• the choice of legal form of business for individuals who would like to start a business.

It is often the case that one individual is affected by several issues of the above-mentioned taxes in a given tax year, and this requires proper consideration of all these circumstances, for example, when preparing a tax return.

Are the services of a tax advisor expensive?

No regulation rigidly regulates the rates of remuneration for a tax advisor for his services, so it is determined by negotiation with the client. Before establishing cooperation, you can request the advisor to provide a price list of services and estimate the price of the service for your case.

Practice shows that it is much more cost-effective to consult even an uncomplicated tax matter with an advisor, as sometimes a minor mistake can result in much higher costs than an advisor’s fee (including, for example, lost time to appear at the tax office for various explanations).

It is worth remembering that in addition to the tangible (financial) benefits of using the services, there are also intangible ones. Unfortunately, they are less often noticed by people, and often represent greater value than financial benefits. The complexity of the tax system often creates fear of getting it wrong and the serious consequences. Tax proceedings before tax authorities can be even more stressful. It is not difficult to see that professional support strongly offsets these negative emotions. There are also situations when the taxpayer does not know whether he will have to pay tax, and this state of ignorance also generates unnecessary stress. Information from an advisor that the taxpayer has nothing to fear can provide mental comfort to the taxpayer.