Adjustment of tax-deductible costs – another favorable judgment

We wrote recently about favorable judgment of the Supreme Administrative Court (ref. No 221/13), which ruled that tax authorities can’t demand from a taxpayer a retroactive adjustment of tax-deductible costs. It would be against the law and the principle of the rule of law, when such a demand of adjustment is followed after a proper settlement of costs and was not caused by a taxpayer, who could be accused of a violation of law. The case was concerned with a subsidy received by the taxpayer to its purchased assets.

 At the end of March Supreme Administrative Court ruled another judgment (ref. No II FSK 955/14), which confirmed the abovementioned respective jurisdiction. The judgment refers this time to a very frequent situation, where a taxpayer has received a discount after the purchase. The court found (contrary to the tax authorities) that in such situation the discount as a reduction of tax- deductible costs should be recognized in this reconciliation period in which it was granted (and definitely not retroactively - at the date of the original purchase).

REFERENCES