Limitation on tax deductibility of certain intra-group charges was introduced in regulations that came into force on 1 January 2018 – the limitation covers the costs of:

• advisory services, market research, advertising services, management and control services, data processing, insurance, guarantees and other services of a similar nature,
• any types of charges resulting from the use or the right to use intangibles (e.g. royalty payments, trademark or know-how licenses etc.),
• transfer of borrower’s insolvency risk from loans other than those granted by banks, including liabilities resulting from derivatives and other instruments of a similar character.

According to binding regulations, there is a safe harbour amounting to PLN 3 million (on an annual basis) plus 5% of tax-adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). If above mentioned fees are above such limit, they are treated as non-tax deductible unless they are directly linked with taxpayer’s revenue (in economic terms and not necessarily in tax or accounting ones) or a taxpayer has a binding APA decision for the given transaction.