Entrepreneurs under increasing pressure - MDDP and Confederation Lewiatan report points to uneasy relations with tax authorities

The tax advisory firm MDDP has published a report entitled “Entrepreneurs under the fiscal microscope 2025. “Entrepreneurs under the fiscal magnifying glass 2025“, prepared in cooperation with Konfederacja Lewiatan. The document analyses the control activities of the tax authorities in 2019-2024 and diagnoses the current relations between the tax administration and entrepreneurs.

The report shows that control activities of the tax authorities are the order of the day. The number of customs and tax inspections has increased significantly in recent years – in 2019 they accounted for only around 12% of all inspections, and in 2024 they already accounted for more than 38%. Between 2019 and 2024, a total of 117,500 checks were carried out. This means that an average of 77 inspections were opened every day in Poland.

“We observe that customs and tax inspections are displacing traditional tax inspections. However, checking activities are the most popular, which, on the one hand, allow for faster checking of taxpayers’ accounts, but, on the other hand, may provide less protection for taxpayers.” – comments Jakub Warnieło, tax advisor and head of the tax and litigation team at MDDP.

VAT invariably remains the most frequently audited tax, accounting for 81% of the total loss in tax audits and 61.5% in customs and fiscal audits. In customs and tax audits alone, the average value of arrears was over PLN 1 million, while for tax audits it was approximately PLN 195 000.

The data on the effectiveness of the controls are surprising. In 2024, as many as 98 out of 100 completed tax audits resulted in the detection of irregularities. The situation is similar in the case of customs and fiscal inspections (94%). This raises the question of whether the tax authorities are so good at selecting taxpayers for audits, or whether, however, the rule is that every audit ‘must’ end with the finding of errors.

The length of audits is also a cause for concern. In 2024, customs and tax audits took an average of 332 days and tax audits 113 days. This is far longer than the regulations stipulate. Moreover, in only 1 in 10 cases was the taxpayer informed in advance of a planned tax audit (although this should be the rule).

The report also points to the growing number of precautionary decisions – a total of 3,494 were issued between 2019 and 2024, securing tax liabilities worth a total of nearly PLN 8.8 billion. The vast majority of these relate to VAT arrears.

“Entrepreneurs expect fair and transparent treatment. The aim of our report is to encourage a constructive dialogue between entrepreneurs and the tax administration,” – emphasises Przemysław Pruszyński, Director of the Tax Department of the Lewiatan Confederation.

The report contains a set of recommendations aimed at improving taxpayers’ relations with the tax authorities. The authors of the publication emphasise in their study the need for a balance between the effectiveness of control and the protection of entrepreneurs’ rights.