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mBank S.A. beats tax office over prudential fees


The Tax Practice has successfully advised mBank S.A. in a dispute before the Voivodship Administrative Court (VAC) in Warsaw. The dispute concerned a negative individual ruling issued to the Bank on whether prudential fees payable to the Bank Guarantee Fund in 2016 could be treated as tax costs. The win enabled the Bank to increase its 2016 tax costs by several million zloty.

In the appealed ruling, the Director of the National Revenue Information office refused to allow the Bank to include prudential fees for 2016 in tax costs. The tax authorities’ negative stance covered, inter alia, the prudential fee for Q4 2016. The Director of the National Revenue Information office questioned the inclusion of this fee in tax costs despite, at the time the fee was paid, the Bank no longer being covered by the provision excluding this expenditure from tax costs.

In the past, prudential fees (incurred by banks under the Act on the Bank Guarantee Fund, the Deposit Guarantee Scheme and Compulsory Restructuring of 14 December 1994) could not be included in tax costs. These fees met almost all the grounds for being treated as an indirect cost. However, the possibility of them being included in tax costs was explicitly excluded by art. 16(1)(68) of the CIT Act. This provision was repealed by the legislator on 9 October 2016. After this date, the prudential fee for Q4 2016 became due. Despite the legislative amendments, the Director of the National Revenue Information office questioned its inclusion in tax costs. The authority’s stance was criticised by the VAC in Warsaw. The negative individual ruling was set aside by a judgment of 30 May 2018 (case no. III SA/Wa 2595/17).

The win before the VAC in Warsaw should bring the client significant tax savings. The win is also important for the entire banking sector – it gives banks a valid argument for increasing their 2016 tax costs by including the prudential fee for the last quarter of this year.

The case was conducted by DZP lawyers Artur Nowak and Piotr Prokocki from the Tax Practice.

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