Another Favorable Ruling on the Allocation of FGŚP Subsidies to Exempt Business Activities
We are pleased to announce that we have secured another positive court ruling for our special economic zone client regarding the tax treatment of subsidies from the FGŚP (Guaranteed Employee Benefits Fund) under Article 15g of the Covid-19 Act.
This type of case has raised many uncertainties, particularly due to the tax authorities’ position that such subsidies should be considered taxable income allocated to taxable activities.
After an unfavorable tax interpretation, our case was brought before the Provincial Administrative Court (WSA) in Łódź, which ruled that there is a direct link between FGŚP subsidies and special economic zone activities. Therefore, the subsidy amount should be allocated to tax-exempt activities. This view was also upheld by the Supreme Administrative Court (NSA). The ruling further stabilizes tax practice in favor of taxpayers.
We encourage businesses to review their tax settlements to ensure the correct income allocation of FGŚP subsidies. This is particularly relevant for special economic zone entrepreneurs, as they may be eligible to apply for a refund of overpaid taxes.
“It may turn out that there is an opportunity to recover overpaid tax,” says Łukasz Łebski, Director of the Tax Reliefs and Incentives Team at Thedy & Partners.