A currency loan affects borrowing costs

Lidia Strzelecka, Anna Trojanowska
Rzeczpospolita

As of 1 January 2018, borrowing costs are not deductible for income tax purposes to the extent exceeding borrowing costs are more than 30% of what is called tax EBITDA, subject to a safe harbour of PLN 3 million. The article is about requirements related to adjusting borrowing costs on account of exchange differences realised on repayment of the underlying currency debt. According to the authors, with respect to borrowing costs subject to those restrictions, when making f/x adjustments in case of currency debt repayment, taxpayers should ensure that the resulting f/x gains are deducted from while f/x losses are added to the borrowing costs.