Starting from January 1, 2018, Polish regulations on thin capitalization are going to be amended. The two applicable methods for calculation of non deductible interest on financing (mostly loans), are going to be removed from the Corporate Income Tax Act. Instead, the Polish legislator is introducing a new method for thin capitalization regime in Polish tax system. The new method is going to be based, in principle, on EU ATAD Directive from July 12, 2016 (No. 2016/1164). According to the current wording of the proposed amendment to the CIT Act (which is still under legislation procedure), the new limit is going to be calculated in reference to 30% of EBITDA. The new method shall be applicable not only to loans received from related parties, but also to financing (in a broad meaning, including also specific leasing cases) from third parties. The inter-temporal regulations allow to apply the old regulations until the end of 2018, under the condition that the relevant loan is factually transferred still in 2017.
New thin capitalization regulations in Poland from January 1, 2018