The tax authorities are very restrictive in interpreting the existing 1 January 2018 limitation of the right to include in the tax costs expenditure on intangible services.
It's about Article 15e The CIT Act, according to which the possibility of obtaining revenue from the acquisition of related services and intangible and legal values is limited. However, the problem is that the rules are very vague and the tax authorities make a free interpretation of them. The scale of the problem is demonstrated by the fact that the issue is already approx. 1500 individual interpretations of the application Article 15e CIT Act.
Administrative courts, in most cases, present the view that agency services, as well as sales brokering services, are in fact not services similar to those specifically indicated under Article 15e(1)(1) CIT Act.
Examples of services that are the subject of numerous disputes between tax authorities and taxpayers are commercial and agency brokering services, which are often treated as services similar to advisory, management and control services, market or advertising research. Therefore, in the authorities' view, these services should be subject to a limit on the cost of intangible benefits, as should those services.
This position is confirmed by the last individual interpretation dated 19 June 2020 (reference no. 0111-KDIB1-3.4010.191.2020.2.JKT), According to the Authority, it is difficult to imagine a service of acquiring new customers without simultaneously promoting it, advertising it, providing information about it, its advantages, its values, places and possibilities of acquiring it, encouraging the acquisition of the product from this and not another economic operator, so without all the activities which, as indicated above, are characteristic of advertising services.
On the ground Article 15e The CIT Act is otherwise addressed by administrative courts. Although there are also judgments confirming the position of tax authorities, this is not the dominant position.
Administrative courts, in most cases, present the view that agency services, as well as sales brokering services, are in fact not services similar to those specifically indicated under Article 15e(1)(1) CIT Act. This is confirmed, among other things, by the decisions of the WSA in Krakow with 20 February 2019 (reference no. I SA/Kr 1398/18) whether the last sentence of the WSA in Warsaw with 5 March 2020, (reference no. III SA/Wa 1860/19).
As has been pointed out by the practice so far, the application of tax-reduction rules to services purchased from related entities is subject to the risk of tax authorities questioning taxpayers' accounts.
Tax payers continue to have a dilemma as to whether the expenditure on commercial brokering services can be deducted from revenue.
At present, the only way to secure at risk of expenditure is to carry out a prior price agreement procedure, the so-called APA, which is highly formalised, costly and long-term, or to conclude the tax agreement in question under Article 20zb(2) Tax Ordinance, However, this solution is only addressed to the largest taxpayers who have received a positive opinion on the preliminary audit and have declared that they have fulfilled numerous reporting obligations.