KSP wins a case for Poland’s largest carrier
KSP Tax Team represented PKP Cargo S.A in a case regarding damages paid for loss, deficiency or damage to a consignment in transport. A question was posed whether the amounts of money paid or to be paid in the future as damages for loss, deficiency or damage of a consignment can be recognised as deductible costs in the light of the tax regulations. The Province Administrative Court of Warsaw, in its judgement of 13 May 2015 held that a situation where a consignment is lost, e.g. as a result of theft, does not involve a defective performance of a service but rather its non-performance. Thus, the provisions of Article 16(22) of the Corporate Income Tax Act do not apply to a loss of a consignment. Consequently, if the expense is linked to revenues on a general basis, the amounts paid as a result of the loss can be recognised as deductible costs.