On 14 January 2021. The Director of National Fiscal Information issued an individual interpretation (0111-KDIB1-2.4010.274.2020.2.AW) to determine whether advance invoices not settled in a given tax year are included to the limits in a controlled transaction of a homogeneous nature.
According to the Applicant, under Article 11k(3)(2) of the Corporate Income Tax Act, advance invoices are not a cost under the Corporate Income Tax Act, so they should not be recognized on the cost side.
In the opinion of the tax authority, the Applicant should take into account all received or issued invoices concerning a given fiscal year, including advance invoices, because Art. 11l.2.1 of the Corporate Income Tax Act refers to invoices concerning a given fiscal year, not excluding advance invoices.
In this situation, the rule according to which advance payment invoices do not constitute costs under the Corporate Income Tax Act does not apply either, and thus they should not be recognized as costs.
In view of the above, the tax authority recognized the applicant’s position as incorrect.
Author: Beata Rawa – Transfer Pricing Manager