In the past six years, Polish customs and tax offices have conducted over 6,000 post-import audits, with more than half uncovering irregularities. The audited entities were required to settle additional dues amounting to over 800 million PLN. The upward trend is evident – in 2018, post-audit adjustments amounted to nearly 30 million PLN, whereas last year it was close to 560 million PLN. The average additional charge per audit revealing irregularities last year was over 500,000 PLN. According to PwC Polska experts, if the upward trend continues, the total annual customs and tax adjustments from audits may soon exceed 1 billion PLN, as highlighted in the report “Trends in Customs Procedures – Analysis of Customs and Tax Audits and Polish Administrative Court Rulings on Customs Matters” by PwC Polska.
The analyzed data shows that a total of 6,223 audits were conducted. The Lubelski Customs and Tax Office demonstrated the highest activity, conducting 3,106 audits, while the UCS in Zielona Góra performed the fewest (62). The average for all offices between 2018 and 2023 was 389 audits per office. Over the analyzed six years, the Opolski Customs and Tax Office achieved the highest amount of customs and tax adjustments, totaling over 407 million PLN. Consequently, the average additional charge per audit was over 3 million PLN. Additionally, the number of audits in the area of customs classification has increased eightfold between 2018 and the last year. Significant increases were also observed in audits concerning customs value and origin. The constant upward trend in classification audits translates to the highest share in the total customs and tax adjustments, accounting for about 80%.
“Alongside existing customs obligations, additional areas are emerging that importers and exporters must consider when conducting transactions, such as various additional obligations arising from environmental regulations, market protection measures related to anti-dumping/subsidy proceedings, and trade restrictions due to global geopolitical situations, such as sanctions. All these factors make the customs area increasingly important for both entrepreneurs and customs and tax authorities. Hence the increasing number of audits and disputes between taxpayers and authorities in the customs obligations area, many of which end up in court,” says Tomasz Kassel, managing partner of the Tax, Legal and People department at PwC Polska.
Pessimistic conclusions for entrepreneurs also emerge from the analysis of court rulings in customs cases conducted by the PwC Polska team. PwC experts examined nearly 5,000 decisions on customs matters issued by Polish administrative courts between 2018 and 2023. About 88% of the cases ended unfavorably for the taxpayer. Only one in eight rulings was favorable for the taxpayer, either overturning an adverse decision or ruling. The year 2020 recorded the fewest favorable rulings for taxpayers – only one in twenty cases ended positively. The years 2018 and 2022 had the highest number of favorable rulings for taxpayers, with 19% of them being positive. Over the entire analyzed period, an average of only 13% of proceedings ended favorably for the taxpayer.
“We observe an increasing trend in the number of post-import audits, the number of detected irregularities, and the associated adjustment amounts. The most frequently audited customs areas are also the most complex, namely tariff classification, customs origin, and customs value of goods. Although we observe global growth trends, the activity of individual Customs and Tax Offices in the area of audits is not uniform. Consequently, in some areas, audits may occur more frequently than in others. The vast majority of customs cases before Polish administrative courts end unfavorably for taxpayers, maintaining adverse administrative decisions and lower court rulings,” adds Andrzej Zubik, partner at PwC Polska, leader of the Tax Controversy & Dispute Resolution practice at PwC Polska.
In recent years, we have seen a steady increase in customs revenue – from 4 billion PLN in 2018 to over 6 billion PLN in 2023. The visible increase in customs revenue occurs despite rising business awareness and successive free trade agreements with third countries signed by the European Union. Importers should pay particular attention to the accuracy of their customs operations. Tools such as internal regulations and procedures can facilitate control over these operations. Periodic verification of import activities for compliance with customs regulations and other regulations affecting customs and tax dues is also recommended to mitigate risks.
“In the event of a customs and tax audit, it is crucial to address the matter with due attention from the outset and thoroughly analyze the scope of the proceedings. It is advisable to engage a professional representative who understands not only the specifics of customs and tax proceedings but also the complexities of customs law. Having internal procedures that outline the course of action in case of an audit can also be beneficial,” adds Jakub Matusiak, partner at PwC Polska, leader of the Customs and International Trade practice.
Since customs debts generally expire after three years, customs and tax audits carry the risk of revealing accumulated multimillion-dollar dues, including customs duties, customs interest, VAT interest, and, in some cases, additional penalties.
