The Sejm is currently working on a new regulation which is going to limit the possibility to classify interests as tax deductible costs. Once the new regulation comes into effect, it will apply to almost any loan from an affiliated entity.

The aim of the new law on thin capitalisation is to reduce the practice of recognising interests on loans granted to the company by its affiliates as tax deductible costs. The company does not need to have a lot of own capital (hence the term “thin capitalisation”), as it may operate thanks to loans received from its affiliated entities (which remain the holder of more than 25% of its shares) – says Mariusz Aleksandrowicz, attorney-at-law and tax advisor at Furtek Komosa Aleksandrowicz.  

As Mariusz Aleksandrowicz points out, companies will have to thoroughly analyse the sources of their financing before they choose their cost accounting method, and the method they select will apply for at least three tax years.

Autor: Łukasz Zalewski
lukasz.zalewski@infor.pl
Source: Dziennik Gazeta Prawna

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