Taxpayers may include expenses incurred for the acquisition of intangible services from related entities in tax-deductible costs in full, provided that the general conditions for recognising an expense as a tax-deductible cost are met and the expenses are properly documented. This has been possible since 2022, when the Polish Deal abolished the provisions requiring the limitation of costs of intangible services.
The Polish Deal Changed the Rules
Until the end of 2021, under Article 15e of the Corporate Income Tax Act (CIT Act), taxpayers were required to exclude from tax-deductible costs expenses incurred directly or indirectly for the benefit of related entities (or so-called tax haven entities) in respect of:
- advisory services, market research, advertising, management and control, data processing, insurance, guarantees and sureties, as well as services of a similar nature;
- all types of fees and charges for the use of, or the right to use, rights or assets referred to in Article 16b(1)(4–7) of the CIT Act, i.e. copyrights and related rights, licences, industrial property rights and know-how;
- the transfer of the risk of a debtor’s insolvency in respect of loans, other than loans granted by banks and cooperative savings and credit unions, including obligations arising from derivative financial instruments and services of a similar nature,
to the extent that the total amount of these costs in a tax year exceeded PLN 3 million plus 5% of the amount corresponding to the so-called tax EBITDA.
The amount of costs excluded in this manner could be deducted by the taxpayer in the following five tax years, subject to the limitation applicable in a given year.
The above provision gave rise to numerous interpretative doubts, and its application was the subject of disputes between taxpayers and tax authorities. The uncertainties concerned not only the method of calculating the limitation, but also its scope. The open-ended catalogue of services subject to the restriction, partly similar to the catalogue of services covered by withholding tax regulations, additionally made the correct classification of expenses more difficult.
As of 1 January 2022, as part of the Polish Deal legislation, Article 15e of the CIT Act was repealed. The explanatory memorandum to the draft legislation stated that this solution would be appropriately reflected in the provisions concerning the domestic minimum income tax under Article 24ca of the CIT Act, while taxpayers would be able to include expenses incurred for the acquisition of intangible services from related entities in their tax-deductible costs without applying the limitation.
Although taxpayers welcomed this change, further questions arose: what would happen to the costs of intangible services that taxpayers had been required to exclude from tax-deductible costs by the end of 2021, but which were to be settled over the following five tax years?
Protection of Acquired Rights
Pursuant to Article 60(1) of the Polish Deal, i.e. the Act of 29 October 2021 amending the Personal Income Tax Act, the Corporate Income Tax Act and certain other acts (Journal of Laws of 2021, item 2105, as amended), CIT taxpayers who, before the end of a tax year commencing before 1 January 2022, acquired the right to deduct costs under Article 15e(9) of the CIT Act in its previous wording retained the right to deduct those costs after 31 December 2021, within the scope and on the terms specified in that provision.
This provision is a key transitional rule intended to protect taxpayers’ acquired rights following the repeal of Article 15e of the CIT Act. The excess costs of intangible services did not simply disappear – taxpayers retained the right to settle them despite the repeal of the provision itself.
This means that in 2026, taxpayers will settle costs of intangible services for the last time under the rules applicable before the Polish Deal entered into force, i.e. using the historical limitation mechanism. In 2026, the fifth and final year for settling costs of intangible services incurred in 2021 expires.
Calculation of the Limitation in 2026
Since 2022, taxpayers seeking to settle the historical excess of costs of intangible services have still been required to calculate the PLN 3 million + 5% of tax EBITDA limitation for each tax year. Despite the repeal of Article 15e of the CIT Act, it was therefore necessary in practice to continue calculating the limitation for the purposes of settling historical costs.
Importantly, when calculating the limitation for a given year, taxpayers should not include current costs of intangible services incurred after 1 January 2022, as such costs are no longer subject to the limitation following the repeal of Article 15e of the CIT Act.
Consequently, for the purpose of determining the limitation applicable to the deduction, it was necessary to assume that Article 15e of the CIT Act continued to apply, but exclusively to costs previously excluded from tax-deductible costs.
Despite the tax authorities’ previously consistent position, an individual tax ruling issued on 14 February 2024 (0111-KDIB2-1.4010.592.2023.2.MM) stated that, when calculating the limitation in the years following 2022, current costs of intangible services should also be taken into account. This view raised significant concerns among taxpayers regarding the correctness of the calculations they had been applying, and the ruling itself attracted considerable media attention. In addition, the Ministry of Finance responded to journalists’ questions at the time in a way that could be interpreted as supporting the different position taken by the Director of the National Revenue Information Service.
Ultimately, the ruling was amended on 20 January 2025, and individual tax rulings issued subsequently once again confirmed the approach previously adopted by taxpayers, for example the individual tax ruling of 18 February 2025, ref. no. 0114-KDIP2-2.4010.687.2024.1.SJ.
Taxpayers were able to choose the year within the five-year period in which they would deduct historically non-deducted costs. For example, a taxpayer could settle costs not deducted in the years 2018–2021 as late as 2025 or 2026, even though the right to deduct them had existed since 2022. In practice, taxpayers most often settled the excess costs of intangible services in accordance with the FIFO principle, i.e. by first settling costs not deducted in previous years that had been incurred earliest.
It should be borne in mind, however, that if taxpayers do not settle the entire excess of costs of intangible services incurred by the end of 2021 in 2026 – i.e. if costs exceeding the limitation calculated for 2026 remain – those costs will definitively lose their status as tax-deductible costs and cannot be taken into account in subsequent tax settlements.
This approach was confirmed by the Director of the National Revenue Information Service in numerous individual tax rulings, including rulings of 20 February 2024, ref. no. 0111-KDIB1-3.4010.20.2024.1.ZK; 23 August 2023, ref. no. 0114-KDIP2-2.4010.320.2023.1.PK; 17 October 2022, ref. no. 0111-KDIB2-1.4010.466.2022.2.PB; and 20 September 2022, ref. no. 0111-KDIB2-1.4010.486.2022.1.BJ.
“Special Economic Zone Entities” Not Required to Apply the Limitation to Intangible Service Costs
Another source of disputes concerned the application of Article 15e of the CIT Act to activities conducted within Special Economic Zones (SEZs).
According to taxpayers, when determining the excess of costs of intangible services subject to exclusion from tax-deductible costs under the historical wording of Article 15e of the CIT Act, costs attributable to activities exempt from CIT under Article 17(1)(34) of the CIT Act, i.e. activities conducted within an SEZ, should not be taken into account.
Although the tax authorities consistently challenged the taxpayers’ position in this respect, administrative courts have for several years regularly sided with “SEZ entities”, overturning unfavourable individual tax rulings.
Taxpayers continue to pursue disputes concerning the possibility of treating costs of intangible services attributable to SEZ activities as tax-deductible costs without applying the limitation under Article 15e of the CIT Act. For example, in its judgment of 13 June 2025 (II FSK 1207/22), the Supreme Administrative Court stated:
“It follows directly from Article 7(3) of the CIT Act that, when calculating taxable income, revenue and costs from activities conducted in an SEZ are not taken into account (…). In other words, the appropriate application of the above provision means that, from the perspective of Article 15e(1) of the CIT Act, only revenue and costs relating to taxable activities are relevant.”
The Supreme Administrative Court adopted a similar position in its judgments of 4 February 2025 (II FSK 580/22) and 23 April 2025 (II FSK 17/25).
These judgments form part of an already established line of case law confirming the taxpayers’ position.
Conclusion
The year 2026 marks the end of the five-year period for settling historical excess costs of intangible services incurred in 2018–2021. It is therefore the final opportunity to settle costs that have not yet been deducted, using the limitation calculated for 2026. Any unused amounts will definitively expire and cannot be taken into account in subsequent tax settlements.
In case of any doubts regarding the treatment of historical costs of intangible services, taxpayers may still consider applying for an individual tax ruling.