Poland: Definition of “joint venture”; deductibility of employment contract termination costs (court decisions)
Court decisions relating to the definition of “joint venture” and deducting costs for terminating an employment contract
Deductibility of employment contract termination costs (court decisions)
The KPMG member firm in Poland prepared a report that includes summaries of the following court decisions relating to the definition of “joint venture” and deducting costs for terminating an employment contract:
- The Polish Constitutional Tribunal on 15 February held (case file SK 71/20) that although the term “joint venture” is not defined in the tax law, a uniform interpretation of the notion of joint venture has developed under case law. The tribunal thus rejected a taxpayer’s contention that the term is ambiguous or imprecise to the extent that it violates the constitutional standards of definiteness of the tax law.
- The Supreme Administrative Court on 14 February 2023 held (case file II FSK 1697/20) that a taxpayer could deduct costs of compensation paid to an employee for early termination of an employment contract. The compensation was paid when the employee’s position was eliminated and the company was not able to terminate the contract by notice. According to the court, the amounts could be deducted because they were necessary expenses and were paid to reduce potential employee claims, and the employment contract termination was not in violation of the contract’s terms and was amicable.
In addition, the report includes a summary of a clearance opinion dated 20 January 2023 (case file DKP2.8082.8.2022) related to a division by spin-off.
Read a February 2023 report prepared by the KPMG member firm in Poland
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