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Key topical tax issues
There are a number of tax issues currently affecting businesses operating in Poland. Taxand Poland summarises the key issues tax payers should be aware of.
Tax capital groups impacted by thin capitalisation
The regulations on income tax do not provide any exclusions in application of the thin capitalisation restrictions to loans granted among entities being a part of a tax capital group. Albeit settlements within the tax capital group are not covered by a transfer pricing regime, they are not excluded from the thin capitalisation rules. Thus, the interest on loans drawn from a holding company may not be fully deductible from the perspective of an entire tax capital group.
VAT correction and tax deductible costs
Correction of VAT accounts impacts also income taxes. Correction of output VAT reported previously as a tax deductible cost (eg with respect to free-of-charge supplies of goods) could result in a retroactive correction of corporate tax accounts for previous periods. The said approach is rather unfavourable for taxpayers and can expose them to a risk of an outstanding liability. VAT recovery (which was previously paid and recognised as a tax cost) could mean an obligation to adjust corporate tax accounts for the past.
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