INTANGIBLE SERVICE EXPENSES INCURRED IN 2018-2019 NOT LIMITED UNDER ARTICLE 15E IF APA APPLIED FOR UNTIL YEAR END

This is to let you know that on 18 October 2019 the Senate approved, without amendments, the Act on the resolution of double taxation disputes and the execution of advance pricing arrangements (the "Act"). The Act is now waiting for presidential sign-off.

In addition to, among other things, introducing a new measure to consolidate dispute resolution rules for double taxation of profits within the EU, the Act also makes changes to advance pricing arrangement (APA) proceedings and to the related CIT Act regulations.

Under the current version of the CIT Act, the holder of an APA does not, within the APA period, have to limit the deduction of its intangible services expenses under Article 15e of the CIT Act, within the scope provided for in the APA. This exemption applies also to the tax year in which the APA was issued and to the previous tax year.

The Act as a whole continues to offer the disapplication of Article 15e limit. However, according to transitional provisions of the Act, if you want to make use of this opportunity with respect to relevant intangible service expenses incurred in 2019 and 2018, you need to file your APA application by 31 December 2019.

Therefore, if taxpayers who were required to apply Article 15e limitation to relevant intangible service expenses in 2018 and 2019 now wish to enable their deduction for tax purposes, they should apply for an APA on or before 31 December 2019.

With respect to the matters discussed above, the Act becomes effective 14 days after publication.

If this issue pertains to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

Doradztwo Podatkowe WTS&SAJA Sp. z o.o. 

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This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.

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