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Intangible services with the limit next year and other changes in the CIT Act


Works are underway on the proposal of the Act amending primarily the Corporate Income Tax Act. As stated in the rationale for the Act published in July 2017, its basic objective is to seal the tax system by assuring the possibility to connect the amount of tax paid by entities with the actual place where income is generated. The Act is also to be a partial implementation of the so called ATAD Directive (Council Directive (EU) 2016/1164 of 12 July 2016).

One of many proposed changes is to limit the possibility to include the costs of intangible services under tax deductible costs. Pursuant to Article 15e, which is to be added to the CIT Act, the possibility to include the costs of:

  1. advisory, accounting, market research, legal, advertising, management and control, data processing, employee recruitment and personnel solicitation services, insurance, guarantees and sureties, and performance of similar character, as well
  2. fees and amounts due for the use of or the right to use copyright or related property rights, licences or industrial property rights

under tax deductible costs, if they exceed in a given tax year the threshold of PLN 1,200,000, will be limited to 5% of EBITDA (to be understood as the sum of income included in the taxable base, tax deductible amortisation charges, difference between borrowing income and expenses) per year. In the case of large entities for which such services usually make an important cost item, the implemented limit may significantly decrease the costs which may be tax deductible.

The legislator also plans to limit tax optimisation entailing the transfer of rights or assets indicated in item b) above and the subsequent use of them under licence or by way of their reacquisition. In the first case, any type of fees and amounts due on account of the use of or the right to use such rights or assets, acquired or developed by the entity and subsequently transferred, exceeding the revenue from their transfer will not be tax deductible costs. While in the case of their reacquisition, tax deductible costs will not include the excess of amortisation charges on the initial value of the acquired intangible assets in a part exceeding the revenue from their transfer.

It should be noted that the proposal of the amending law assumes also significant changes in other areas, among others in relation to:

  • thin capitalisation,
  • regulations on a foreign controlled company (CFC),
  • regulations on tax capital groups,

as well as envisages the so called minimum income tax for the taxpayers holding real properties of significant value (above PLN 10,000,000), amounting to 0.042% of the taxable base (i.e. the initial value on the first day of a month) for each month.


The amendments are to enter into force as of 1 January 2018.

At the moment the proposal is under opinion phase.


Barbara Otrzonsek, tax consultant, ATA Finance