On 24th of October a Supreme Administrative Court (SAC) by virtue of regulations valid in 2016 - 2017 has judged that the position taken by the tax authorities in order to the lack of taxpayers’ permission to deduct expenses incurred on expertises, opinions, advisory services and equivalent services provided by other than scientific units entities in R&D Tax Relief is confirmed.
Legal Status over the period 2016-2017
As recognised by virtue of regulations valid in 2016-2017 taxpayers were entitled to deduct in R&D Tax relief costs incurred on expertises, opinions, advisory services, equivalent services and the results of researches and analysis if these had been purchased from the scientific units.
Simultaneously, in the opinion of many taxpayers stated in the delivered applications of interpellation, regulations allowed to deduct also aforementioned costs (except of purchasing results of researches and analysis) in case of performing these activities by the entities without scientific unit status.
Tax Authorities and the Courts’ Position
Nonetheless, tax authorities did not agree with such interpretation of the regulations. In formed line of interpretative, authorities stated that all of the expenditures on expertises, opinions, advisory services and equivalent services must be incurred on scientific units in order to be deducted in R&D Tax Relief.
This line of interpretative was challenged in numerous of the judgements of the Province Administrative Courts (PAC). Nevertheless, due to the challengings the favourable for taxpayers’ judgements, none of them has been so far legally binding.
SAC Position
In the judgement given on 24th of October 2019 SAC stated that regulation which was arousing the doubts does not permit to deduct in R&D Tax Relief the costs incurred on expertises, opinions, advisory services and equivalent services in case of delivering these activities by the entities without scientific unit status.
This is the first SAC judgement referring to presented issue. Many of the tax authorities’ appeals are still awaiting for the resolution from PAC judgements that a Court may decide in favour of many points not presented in the commented judgement
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