Emerging Markets Rates and Currencies Handbook

Tax Summary – Poland Poland • Transfer pricing rules apply Deductibility of (FX) Losses • FX loss generally is deductible under the condition expense itself could be treated as tax cost • FX differences as a rule could be only recognized when are factually realized (i.e. Interest paid for loans, equity sale transaction concluded). Depending on taxpayer’s choice (effective for longer period ) it is possible to follow accounting treatment. Other Taxes/Duties • N/A • N/A • N/A • N/A • Civil Law Activities Tax (CLAT) at 1% could be applied for certain sale transactions that are not concluded on WSE or with investment firm intermediation. * However, WHT depends not on contract type, but on nature of payment. WHT could be required, as per current developments in case of CDS for instance, as Polish law puts WHT duties on certain types of services e.g. guarantees and similar. Even if there is WHT under certain tax treaties, it can be reduced to 0% if income recipient is a beneficial owner. ** Derivative payments that have purely speculative character (are no related as economic hedge) loses have been questioned by tax authorities (for purpose of tax deductibility). Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources Country Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities