TAXATION OF INCOME FROM UNDISCLOSED SOURCES OR INCOME EXCEEDING DISCLOSED SOURCES

According to the provisions of the Polish Personal Income Tax Act, income that has not been disclosed by the taxpayer is subject to a 75% income tax rate. This regulation is a form of sanction for taxpayers not revealing their income and at the same time a good ‘addendum’ to the criminal law that cannot always be applied due to lack of evidence. A 75% tax rate can be applied if the value of property gathered by the taxpayer is not covered by documented income. If the income sources are disclosed (even during the tax procedure) - regular tax rates with interests and other forms of sanctions can be applied. The author analyses such issues related to tax regulations connected with non disclosure of income as, for example: money laundering regulations, fields of activity connected with hiding income, evolution of rules, procedure of income assessment, burden of proof and strategy of defense. The author notices lack of effectiveness in tax authorities policy