Due to the ever-increasing popularity of joint liquidity management agreements, the so-called cash pooling contracts, the problem of their taxation under the Civil Law Act is increasingly emerging. Recent tax interpretations should clearly explain taxpayers' doubts about this.
The cash pooling agreement in the Polish legal system is classified as unnamed contracts.
The lack of statutory regulations means that it is a non-uniform structure and, depending on economic needs, it can in principle be shaped freely, but the main objective of such agreements remains to improve the financial liquidity of companies forming a group of capital in terms of their business.
The essence of this type of construction is the proper management of money and debt, which is usually done by the collection of funds of companies forming part of the group. one a main account operated by one of the entities – the so-called pool leader, using additional clearing accounts.
This makes it possible to optimise the management of these measures, through the possibility of balancing surpluses created in one company with temporary shortages of another company, which consequently reduces the costs of the business group.
The cash pooling agreement in the Polish legal system is classified as unnamed contracts. The lack of statutory regulations makes it a non-uniform structure and, depending on economic needs, can be shaped in principle freely, but the main objective of such agreements remains unchanged.
This design may give rise to doubts as to the tax on civil law activities (hereinafter: PCC) due to certain similarities to the loan agreement.
At the outset, it is necessary to specify exactly what is the subject of taxation for cash pooling contracts Act dated 9 September 2000 on tax on civil law acts (Journal of Laws of 2010, item 649 as amended; hereinafter: PCC Act).
Provision Article 1(1)(1) the act contains a closed catalogue of activities subject to tax obligations. This is exhaustive the calculation in which the cash pooling contract was not included, or any other form of unnamed contract.
However, according to 1 section 1 point 1 point (b) The PCC Tax Act is subject to, inter alia, money loan agreements, which, in the light of the above statement of similarity between the liquidity management agreement and the loan agreement, has become a cause of concern for taxpayers regarding the legal tax classification of cash pooling contracts.
The above issue was addressed by the Director of the Tax Chamber in Katowice on the day of 15 April 2014 individual interpretation (reference no. IBPBII/1/436-54/14/MCZ).
The facts considered concerned the liquidity management mechanism of the real-time type, the so-called zero-balance method within the capital group, where the companies intended to enter into an appropriate agreement with a foreign bank and exploit the opportunities offered by cash pooling.
According to the applicant, the cash pooling agreement, as well as the other activities carried out to implement the agreement, does not meet the definition of loan based on Article 720 Act dated 23 April 1964 Civil Code (Journal of Laws, item 93 as amended).
The applicant noted the differences between these legal structures, with particular regard to the fact that the cashpooling contract constitutes a financial service contract offered by banks, which is intended for the efficient management of funds belonging to economic operators and does not, in itself, provide a basis for making funds available to the public In contrast to the loan agreement, there is no transfer to ownership of a certain amount of money provided for in the code definition of the loan, together with the obligation to return it subsequently.
The cashpooling agreement also fails to meet the economic objective of the loan, which is expressed in the use for a strictly defined period of time of other people's capital, at a specific amount, in the stated consumption or investment objectives.
The applicant agreed with the interpretative Director of the Tax Chamber in Katowice, although he noted that the cash pooling agreement was indeed the most structurally similar to the loan agreement. However, he found that, despite these similarities, he did not exhaustive it has the essential characteristics of the loan agreement.
According to the Authority, an important criterion distinguishing these two the contract is not included in the cash pooling contract, second the transaction pages and the amount of money transferred.
A similar position was also taken by the Director of the Tax Chamber in Warsaw in an individual interpretation dated 7 April 2014 (reference no. IPPB2/436-73/14-2/L).
The factual situation also concerned the so-called cash pooling on the zero balance and the applicant raised similar doubts about the analogues of the cash pooling agreement to the loan agreement.
However, the Interpretative Authority, as previously interpreted, stated that the proposed cash pooling design, although it contains certain elements characteristic of the loan agreement, cannot be subject to tax under the PCC Act.
On the basis of the above, the Authority indicated that the participant in the cash pooling structure does not know whether its free resources will be used, to what extent and by which participants, and this is a necessary element of the loan agreement.
In conclusion, it should be concluded that, in accordance with the Interpretative Line of the tax authorities, a liquidity management agreement and the activities carried out under it are not subject to PCC, since the cash pooling agreement as an unnamed contract is not subject to taxation under the PCC Act, and this activity cannot also be qualified as a loan agreement.