We assist our clients in preparation of applications to tax authorities for binding interpretations of tax provisions. This may involve:
- meeting to discuss tax issue that requires official interpretation
- analysis of already issued interpretations, judicial decisions and views of legal commentators
- gathering substantive content for reasoning
- sharing with a client conclusions as to the risk of obtaining unfavourable interpretation
- representation in potential appeal proceedings in the case of unfavourable interpretations
It is worth knowing that when a taxpayer obtains interpretation which is contrary to its position, tax authorities are bound by the interpretation they issued and must apply the interpretation unfavourable to a taxpayer during tax inspections.
We also know instances when tax authorities refused to recognise favourable decisions previously issued for a taxpayer due to discrepancies between the application and the state of facts established during the inspection.
In view of the above it is essential that the reasoning presented in the application for binding tax interpretations is sufficient, formulated clearly and logically and the facts are reflected properly and exhaustively.