Algorithmization of Tax Decisions and Constitutional Standards of Legality, Reasoning and Review of Administrative Decisions

Abstract

The article examines the use of algorithmic systems in the process of issuing tax decisions and its compliance with constitutional standards governing the exercise of public authority. The aim of the study is to determine whether and to what extent algorithmic support of the application of tax law is compatible with the principle of legality, the obligation to provide reasons for administrative decisions, and the requirement of effective judicial-administrative review. The analysis focuses on distinguishing between the use of algorithms as tools supporting administrative activities and situations in which the output of an algorithmic system effectively determines the content of an administrative decision. Particular attention is devoted to the legal nature of a tax decision as an act of individual application of law and to the requirement that the tax authority retain a genuine decision-making role. The article also examines the importance of the reasoning behind tax decisions in the context of algorithmization, specifically with regard to the possibility of reconstructing the factual and legal grounds of a decision and assessing the impact of algorithmic systems on the effectiveness of administrative and judicial review. The study employs a legal-dogmatic method, including an analysis of the Constitution of the Republic of Poland, the Tax Ordinance and relevant European Union law, with reference to case law and legal scholarship. This analysis demonstrates that using algorithmic systems in tax administration is not, in itself, incompatible with the constitutional model of public administration. Its admissibility nevertheless depends on maintaining the autonomy of the tax authority in the decision-making process, ensuring the ability to explain the use of algorithmic outputs, preserving the authority’s responsibility for the decision, and guaranteeing effective administrative and judicial review. The boundary of permissible algorithmization is reached where technology ceases to perform a supporting function and effectively replaces the tax authority in the application of law.