In its judgment dated 23 March 2023 (case file III SA/Wa 2277/20), the Supreme Administrative Court stated that interest on late advance payments can be treated as tax-deductible costs.
According to the Court, Article 16(1)(22) of the CIT Act, which excludes contractual penalties from tax-deductible costs, should be interpreted in a narrow manner with no omissions being made.
Consequently, since the provision excludes from tax-deductible costs only contractual penalties and damages for defective goods, works and services and for late delivery of non-defective goods, or late removal of defects in goods, works or services, contractual penalties and damages due under different titles are not excluded.