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Profit calculation in a Special Economic Zone with two permits


Undertakings conducting business under a license on the territory of Special Economic Zones (hereinafter: SEZ) benefit from tax preferences. The income received from those activities is exempt from income tax. The benefits from doing business on the territory of a SEZ are significant enough for zonal companies occasionally to decide to invest further and obtain subsequent permits.


In such cases, however, doubts arise about how to correctly keep accounting records, i.e. whether the business should determine tax-exempt income separately under each permit, or whether it can jointly specify the amount of tax-exempt income and keep a single accounting record for zonal activities. Due to the lack of a uniform standpoint of the tax authorities, this issue is subject to numerous private tax rulings.


This was the case with a company operating in the SEZ on the basis of two permits. The first one was issued in 2012, and the second in 2014 – in connection with the extension of an existing enterprise. The scopes of the activities conducted in the territory of the SEZ determined in both permits was identical. In the company’s opinion, it is obliged to keep evidence that fulfils the requirements of Art. 9 (1) of the CIT Act, in a way that allows, among other things, to determine the amount of income (tax result) exempt from tax on a business activity on the territory of SEZ and subject to tax, regardless of the number of permits. The company argued that no obligation to keeping separate evidence sets for each permit can be inferred from the relevant regulations. Additionally, it should deduct the entire public aid received; firstly, on the day of obtaining the first permit, and secondly after exhausting the public aid limit under the first permit, on the day of issuing the second permit.


However, the above position has not been approved by the tax authority, which stated that the company should keep evidence in a way that allows separate determination of income or loss incurred in relation to each of the permits held. Neither may it discount public aid resulting jointly from all permits held to operate in the zone in the mode of subsequent use of the limits resulting from individual permits. The view of the tax authority was then upheld by the Provincial Administrative Court in Poznań.


Finally, the case reached the Supreme Administrative Court, which set aside the challenged judgment of the Court of the First Instance in its entirety and remitted the case. According to the Supreme Administrative Court (case reference number II FSK 3761/17), the Court of the First Instance failed to consider all the charges raised in the complaint. He also did not refer to the allegation of violation of substantive law provisions consisting in the authority recognizing that it is not possible to discount public aid resulting jointly from all permits to conduct business activity in one SEZ and chronological use of the limits resulting from individual permits.


The issue of conducting accounting records of zonal enterprises conducting business on the basis of two or more permits and chronological accounting of the exemption limit is still controversial. As a result, this issue is very often subject of applications for private tax rulings. Unfortunately, the position adopted by tax authorities in this regard are often contradictory. Doubts have not even been resolved by the ruling of the Supreme Administrative Court in a manner favourable to taxpayers.


Anna Skórska, Tax Consultant, ATA Tax Sp. z o.o.

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