Dorota Białas

Tax adviser (Poland)
Associate Partner
Phone: +48 71 60 60 402

The judgement issued by the Provincial Administrative Court (PAC) in Gliwice on 15 July 2015 (file no. I SA/GI 82/15) is an important voice in an important debate concerning the tax consequences of a merger of a company from a special economic zone with a company from outside the zone. 

The company in question operated in a Special Economic Zone in Poland (SEZ) and outside it. The company bore the so-called shared costs which it was not able to allocate to one business only. The company allocated those costs to individual businesses according to the so-called revenue key in line with Article 15(2) of the Corporate Income Tax Act. It then planned to merge with a company that conducted a business activity exclusively outside the special economic zone by pooling shares and without closing the books of account.- 

In the context of the planned merger the company asked whether in the calculation of the revenue key for the financial year in which the merger takes place it should include also the target company's revenue of that year. In its opinion the revenue should have been included. However, the interpreting authority did not share this view. It held that in order to calculate the so-called revenue key the acquiring company should consider only the income earned since the moment the companies merge. It is only since this moment that the “shared” costs borne by the acquiring company become related to the income earned after the merger.

The PAC, however, overruled that interpretation. In the opinion of the Court, Article 15(2)(2a) CIT Act allowed using the key to account for the shared costs throughout the year in which the companies merged through acquisition. The limitation of the use of the key finds no substantiation in the regulations on the annual tax accounting. This standpoint is favourable for enterprises in SEZs and opens up new tax avoidance opportunities. We would be glad to assist you in this area. Our tax advisers in Rödl & Partner offices in Cracow, Gdansk, Gliwice, Poznan, Warsaw and Wroclaw will be glad to help. They will also answer your other questions about taxes, and will provide legal advice in Poland on conducting a business within a SEZ as well as any other aspects of your operations.