Fakty Komentarze Analiza (Facts Comments Analysis) | Cash pooling according to the regulations on thin capitalisation

What’s new in law, and what should we be aware of?

Facts

Loans from shareholders are one of the most common methods of capitalising a company. From a tax point of view, as far as thin capitalisation is concerned, a loan agreement is also a credit facility, an issue of debt securities, or an irregular or regular deposit. More and more often, tax authorities are also recognising cash pooling as a form of loan in this respect. 

Comments

When deciding to capitalise a commercial company, one should bear in mind that it can entail many tax consequences for the borrower. Before paying out interest, it is necessary to analyse general regulations, regulations on thin capitalisation, regulations on gratuitous services and, in some cases, also regulations on international agreements.

Analysis

Cash pooling is a special type of capitalisation in which there is hardly ever any cash flow typical of a loan. Nevertheless, owing to the purpose of such an agreement, more and more often tax authorities are deciding that cash pooling has similar consequences from the point of view of circumvention of limitations on this capitalisation.  

The full version of the bulletin can be found here.

Do not hesitate to contact us to verify how the changes may impact your tax settlements:

Mariusz Aleksandrowicz, attorney-at-law, tax advisor, partner in the tax department
T: + 48 22 581 44 03
E: maleksandrowicz@fka.pl

Marta Ignasiak, lawyer, tax advisor in the tax department
T: + 48 22 581 44 18
E: mignasiak@fka.pl