Notional interest as tax-deductible costs

by Joanna Litwińska

16 June 2021

Since 2020 CIT payers can disclose under tax-deductible costs notional interest on internal financing coming from the following sources:

• capital contributions made to the company;
• retained earnings allocated to capital reserves;
• retained earnings allocated to other capital reserves.

Who is the relief for

The relief is only for commercial law companies which are Polish tax residents and pay CIT.

Notional interest can be disclosed under tax-deductible costs:

• in the year of the increase in reserve capital or other capital reserves;
• or in the year of making a contribution (as the case may be);
• in subsequent two consecutive fiscal years.