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The costs of debt financing and intangible services in a Special Economic Zone


The limits introduced by the legislator, as part of its battle against aggressive tax optimisation, on recognition as tax deductible costs of debt financing and intangible service costs have posed numerous challenges to taxpayers, which may be attested to by a record-high number of private tax rulings issued in the field.

Additional obstacles have been created for companies acting in special economic zones as certain doubts have arisen in respect of the manner of calculation of the coefficient corresponding to the so-called ‘tax EBITDA’, which allows one to determine the limit for the recognition as tax deductible costs the costs of debt financing and costs of intangible services.

Companies acting in a special economic zone typically obtain both income that is taxable with income tax and such as is exempt from the tax under a permit obtained. In order to ascertain the level of exempt income and taxable income they are forced to match respectively the costs to the sources of income. When it is possible, such costs are allocated directly to the taxable activity or the exempt part of business. Where the costs relate to both taxable and exempt business activities and it is not possible to objectively allocate them to a single business activity, allocation is made based on the so-called ‘revenue key’.

This causes the following question in practice. Should such companies, in calculating the limits under Arts. 15c and 15e of the CIT Act (which are expressed as a percentage of the tax EBITDA), take into account the revenues and costs which related to both the taxable and exempt parts of the business?

The arising doubts primarily surround the general principle whereby in determining the income serving as the taxable base the revenues, and the costs of such revenues, are disregarded inter alia from sources the income from which is exempt from tax. The aim of ascertaining the coefficient corresponding to the so-called ‘tax EBITDA’ is to determine the limit for the recognition as tax deductible costs the costs of debt financing and costs of intangible services. However, in the opinion of the tax authorities, the value of such coefficient has no direct impact on the level of taxable income. Therefore, the above principle concerning determination of taxable income should not apply to its calculation. As a result, in calculating the deduction limit, taxpayers should not exclude the revenues and costs relating to the exempt part of their business.

Since calculation of the deduction limits in question is based on a coefficient that is in turn calculated considering the profit before tax, then it would not be justified to split at the stage of the coefficient calculation the revenues and costs of such revenues into those related to the taxable business and those exempt from tax.


Wojciech Jasiński, Tax Consultant, ATA Tax Sp. z o.o.

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