Basically, existing thin capitalisation rules apply only to loans granted by direct shareholders, provided that such loans exceed the equivalent of three times the value of the company's share capital. Consequently, most of the companies requiring group financing (for example, leasing and CFM companies) have been financed by their grandparent companies. The new provisions envisage not only covering the financing from grandparent companies with thin capitalisation rules, but also the new debt:equity ratio. The thin capitalisation rules will apply if the amount of debt towards related parties exceeds the amount of the company's equity (instead of three times the company's share capital). A very limited netting of debt has also been envisaged – generally, to apply the above rules the loans granted by related parties will be reduced by the loans granted by the taxpayer but only to those related parties. From the perspective of CFM or leasing companies such netting is completely insufficient.
Thus, an alternative provision will be introduced – this new provision will apply to all debt (that is, to related and non-related parties) and set certain limits for interest that can be treated as tax deductible cost. Under this alternative interest on loans, including loans granted by non-related parties, may be treated as tax-deductible cost. However, the amount of interest treated as tax-deductible cost cannot exceed the product of (i) reference rate of the National Bank of Poland from the last day of the year preceding the fiscal year increased by 1.25 percentage points and (ii) the tax value of assets within the meaning of the accounting provisions (that is, the value of assets used for calculation of deferred tax), with the exception of intangible assets, as of the last day of the tax year. This is actually the first limit of the amount of interest to be treated as tax deductible cost – it is based on the NBP reference rate (plus margin) and the tax value of the taxpayer's assets (without intangible assets). As regards this limit, the provisions take into account also the fact that NBP reference rate may fluctuate during the tax year – the limit will fluctuate accordingly.
However, there is a second limit and it is a bit more difficult to satisfy its conditions. In general, the value of interest on loans that may be treated as tax-deductible costs, cannot exceed 50% of operating profit (EBITA). Some taxpayers such as financial institutions, banks and credit institutions may, however, be excluded from applying this limit. As regards leasing companies this condition is usually satisfied, but in the case of CFM companies this is definitely not the case. Moreover, it is not the end of conditions to be satisfied in order not to apply the above limit – apart from having the status of a financial institution, in the case of a leasing company at least 80% of its total revenues have to result from (i) leasing contracts within the meaning of the tax law (including sales of the leased goods) or (ii) loans granted to co-finance projects within common agricultural policy (CAP), cohesion policy as well as common fisheries policy. There are also similar requirements as regards revenues generated by the companies dealing professionally in trading receivables.
For some of the companies the new provisions may necessitate a change to the portfolio of revenues, however, some taxpayers may be simply forced to look for external financing.
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