A correction of tax settlements following a change in the classification of income may lead to surprising consequences. This is confirmed by the tax ruling issued by the Director of the National Tax Information (KIS) on 13 August 2026 (ref. no. 0111-KDIB2-2.4017.1.2026.1.MM), which addressed the possibility of crediting a tax overpayment resulting from a correction of the PIT-36 return against the tax liability reported in the PIT-38 return, as well as the rules for calculating late-payment interest in such a situation.
The case concerned a taxpayer participating in an incentive programme based on shares in a company belonging to a capital group. For several years, she had reported income related to the programme as employment income. Subsequently, after obtaining individual tax rulings confirming the possibility of applying Article 24(11) of the PIT Act, she concluded that the income should instead be classified as income from capital and taxed only upon the disposal of the shares.
As a result, the taxpayer planned to correct her 2020 tax settlements by excluding the income from the PIT-36 return, which would result in a tax overpayment, and reporting it in the PIT-38 return, which would give rise to a tax liability. She therefore questioned whether the overpayment could be credited against the liability and whether late-payment interest would be charged in such a situation.
The taxpayer argued that the overpayment resulting from the correction of the PIT-36 return should be credited against the tax liability reported in the corrected PIT-38 return. In her view, this followed from Articles 76 and 76a of the Tax Ordinance, which provide for the crediting of tax overpayments against tax arrears.
The applicant also argued that the overpayment had arisen when the original 2020 tax return was filed, rather than only when the correction was submitted. Consequently, the overpayment should, in her view, be credited as of the date on which it arose, i.e. the date on which the original return was filed.
The taxpayer further argued that there were no grounds for charging late-payment interest on the liability reported in the PIT-38 return. She emphasised that the tax authority had at all times held funds corresponding to the amount of the subsequent tax liability, as those funds had previously been paid as tax on income incorrectly classified as employment income. According to the applicant, charging interest in such circumstances would violate the principle of proportionality, since the State Treasury had not suffered any actual financial loss.
In support of her position, the taxpayer also referred to the case law of administrative courts concerning value added tax, which emphasised the compensatory nature of late-payment interest and the lack of justification for charging such interest where the State Treasury had already held the taxpayer’s funds.
The Director of the National Tax Information partially agreed with the taxpayer’s position. He confirmed that the overpayment resulting from the correction of the PIT-36 return could be credited against the tax liability reported in the corrected PIT-38 return. The authority indicated that the possibility of such crediting follows from Articles 76 and 76a of the Tax Ordinance.
However, the authority disagreed with the taxpayer’s view that late-payment interest should not be charged in the circumstances described. According to the authority, the tax arrears reported in the PIT-38 return arose when the deadline for payment of the 2020 tax expired. Consequently, late-payment interest is charged on those arrears from the day following the payment deadline, in accordance with the general rules.
The key issue in the case was determining when the overpayment arose. The Director of the National Tax Information held that although the overpayment resulted from the original overpayment of tax, for the purposes of crediting it against the tax arrears, the decisive event was the filing of the corrected tax return. The authority emphasised that only the correction removes the presumption that the original tax settlement was correct and reveals the existence of the overpayment. Consequently, the overpayment may be credited against the tax arrears only after the corrected tax return has been filed.
The Director of the National Tax Information also pointed out that the Tax Ordinance does not provide for an exception allowing late-payment interest to be waived solely because an overpayment exists in relation to a different tax settlement. In the authority’s view, the fact that the funds had previously been at the disposal of the tax authorities is irrelevant to the obligation to charge interest, which is a statutory consequence of the existence of tax arrears.
The ruling therefore leads to a situation in which the taxpayer bears the economic burden of interest for a period during which the tax authorities had already held funds corresponding to the amount of the subsequent tax arrears. The authority based its decision on the formal point in time at which the overpayment was disclosed through the correction of the tax return, disregarding the economic effect of the earlier tax payment. In practice, this means that an incorrect classification of income may result in an obligation to pay interest even where the State Treasury has not suffered any actual financial loss.