Members of corporate groups often purchase various support and management services from related parties (under Polish tax law these services are called “intangible services” and include, without limitation, advisory, legal, accounting, management, HR and similar services). Any such purchase should be duly documented as the services are increasingly in the spotlight of tax authorities.
Regardless of the nature of the particular intangible service, they are all similar in that their results are often not in the form of tangible deliverables so that it may be difficult to prove that they have actually been performed. In effect, the tax deductibility of the associated purchase expenses may be challenged by tax authorities.
In our experience, in the event of an audit tax authorities require evidence that the services (i) have actually been performed and (ii) are associated with income or with securing a source of income. If such documentary evidence is missing, the authorities may contest the deductibility of the related expense (in whole or in part), potentially leading to arrears of tax.
The law itself is not precise about how to prepare such documentary evidence and what should it be. Courts clearly are of the view that a mere contract or invoice is not sufficient evidence that intangible services have indeed been performed (see case no. I SA/Łd 682/24, Łódź Provincial Administrative Court, judgment dated 5 March 2025). Rather, the services should be supported by documents permitting a clear identification of their performance and it is the taxpayer that has the burden of proving performance and providing sufficient supporting documentation (see case no. I SA/Lu 278/24, Lublin Provincial Administrative Court, judgment dated 25 September 2024).
We believe intangible services can well become a routine checkpoint during tax audits after Article 15e CITA, which limited the deductibility of the related expenses, was repealed and taxpayers have been filing claims for overpaid corporate income tax for the period 2018 to 2021 while the government has been seeing a decrease in revenues from the national minimum tax and the shifted (diverted) income tax.
Importantly, a proactively implemented policy governing evidence for intangible services can shield you against attempts to challenge your deductions or impose criminal tax liability, substantially increasing your tax safety in the event of an audit.
If this issue pertains to your business and you are interested in our assistance, please contact us.
This blog post 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.