MF clarifies how to calculate the five-year period for loss settlement by PGK
When calculating the period of the next five consecutive tax years for the purposes of accounting by a company for a loss incurred prior to joining PGK, the tax years of PGK are not taken into account, the Minister of Finance explains in a general interpretation.
The MF’s latest general interpretation concerns Art. 7(5) of the CIT Act with respect to the manner of determining the period of the next five consecutive tax years. The scope of the interpretation includes explanations on how a company should account for losses incurred and not accounted for in the years preceding the first tax year of a tax capital group, after the tax capital group ceases to operate.
– As explained by the head of the MF, the five-year period referred to in Art. 7(5) of the CIT Act (in relation to the loss incurred by the company prior to the formation of PGK) is suspended as a result of the company joining PGK. The time limit begins to run with the commencement of the company’s next tax year, as it is the nearest consecutive tax year of the entity that is entitled to settle this loss. Additionally, the Minister of Finance emphasized this interpretation of art. 7. 5 of the CIT act is in line with the position presented by administrative courts,” Łukasz Kupryjańczyk, tax advisor and partner at Thedy & Partners, quotes the MF.
The general interpretation was published in the Official Journal of the Minister of Finance under no. 148. The interpretation has the reference number DD6.8202.4.2021.