In this episode we talk with Tomasz Michalik, a tax partner of the Polish leading tax firm MDDP who is among two Band 1 tax lawyers by Chambers Europe. We discussed his new book on VAT commentaries, the VAT law changes in e-commerce as of 1 July 2021 throughout the EU, future of the tax profession, some tax stories, how to resolve tax issues of those who cannot afford a tax lawyer, golf & tennis, and values. Meanwhile Tomasz has won the Indirect Tax Practice Leader of the Year award at the ITR EMEA Tax Awards 2021.
Tomasz Michalik in not only a top tier tax partner of a top tier tax firm in Poland, but also an author of a more than 1000 pages book on commentaries to the Polish VAT law. Tomasz also described in short the essence of the VAT revolution for e-commerce as of 1 July 2021 throughout the EU – what are the main ideas and impact for consumers and businesses. One major change he highlighted is that the traders from outside the EU will not be able to sell to EU consumers without VAT under the roof of small value items. The other major change will be that internet sales platforms will be deemed for VAT purposes as buyers and sellers of goods sold through the platforms.
The future of the profession
An interesting fact mentioned by Tomasz was that roughly more than ½ of decisions of the tax authorities are challenged in courts. So, his prediction is that tax disputes and compliance will only increase workload of tax professionals, despite simplification and automation of certain processes. Especially regarding tax compliance soon we may experience that tax advisors become assistants to IT teams, especially regarding compliance.
An interesting story by Tomasz was about coffee. Some time ago in Poland cappuccino was regarded a milk (7% VAT), not coffee (23% VAT) drink, because of the local statistics code as proportionally there is more milk than coffee in a cup, although everybody understands it’s a coffee drink. The courts confirmed such an approach, and the law had to be changed. We also exchanged a couple of small stories about hyper-inflation during the difficult part of the Polish history.
Charity, arbitration or automation for the poor
We discussed that in both our countries there is a problem that many important tax issues do not ger resolved in tax payer’s favour just because a person cannot afford to hire a tax lawyer. In essence the person is denied his/her fundamental right of access to the court. For that reason Janis was suggesting that a charity or automation of tax dispute documents could be a solution, whereas Tomasz was expanding the idea towards a special arbitration created for such purposes.
Golf vs. tennis
Tomasz recharges his batteries by playing tennis. We exchanged some interesting information on how these two sports are similar and different.
Firm vs. personal values
Tomasz shared that the firm is involved in the legislative process, because it cares about the environment it works in, not in order to fix something for someone. Also for Tomasz personally it’s important to share the knowledge so the businesses can have a better tax environment. In case of winning EUR 10 mil. In a lottery Tomasz would use it on books. This is in line with a great MDDP initiative to create book lending places at the countryside.