May62025
Right to a tax overpayment refund in a Tax Capital Group after its dissolution - precedential judgment

Precedential judgment on the right to a tax overpayment refund in a Tax Capital Group after its dissolution

The first final judgments in Poland confirmed that the right to recover tax overpayment by a tax capital group (TCG) following its dissolution is granted to each company that was previously a member of that group.

The case concerned the possibility of recovering overpaid tax by a tax capital group after the cessation of its operations. So far, tax authorities have limited the right to overpayment of TCG and claimed that the overpayment is granted only to those entities that previously generated income during the existence of the PGK.

The Provincial Administrative Court in Warsaw accepted the concept that each of the companies that was part of the  liquidated PGK may apply for recovery of the overpayment generated in the PGK (even if such company did not generate income). The manner in which the overpayment will be divided between the members of the PGK should be beyond the  decision of the tax authorities.

This landmark ruling is of significant importance for all tax capital groups (TCGs) in Poland and may have a crucial impact on  increasing the popularity of establishing such groups in the future.

The judgment fills a legal gap in the tax regulations concerning the right to claim overpayment in TCG settlements and  clarifies who is entitled to recover such overpayment following the dissolution of the TCG.

Until now, the establishment of a TCG was associated with significant problems related to the possibility of recovering overpayments that arose in the PGK. Tax authorities – referring to the lack of appropriate regulations – often prevented the real recovery of such overpayments. The judgment of the WSA is therefore of great importance for all companies included in the PGK and confirms their rights to overpayment of tax.

The legal representative in this case was Jakub Warnieło.

Judgments of the Warsaw Provincial Administrative Court (WSA) dated 20 March 2024, case no. III SA/Wa 2584/23; 25 April 2024, case no. III SA/Wa 377/24; and 25 July 2024, case no. III SA/Wa 955/24.