Olga Rybak, Rafał Kosiń
Rzeczpospolita
Companies in the renewables sector, e.g. those engaged in the development of photovoltaic or wind farms, incur various project-related charges, including fees for connecting their farms to the power grid. An important tax question in this context is whether such a fee should be treated as part of CAPEX and so deducted for tax purposes via depreciation charges, or should rather be deducted directly as and when incurred. Corporate income tax law is silent on these connection fees and similar charges. The only statutory guidance is the fairly general rule that capital expenditures include all costs incurred directly in connection with project development. In accordance with the most recent tax rulings, grid connection fees should be deducted for tax purposes as and when incurred. However, the earlier approach of the tax authorities was quite inconsistent.