Starting as of 1 January 2016 restrictions on tax deductibility of unpaid liabilities is to be eliminated from Polish regulations on income tax.
Existing regulations stipulate that in case when a liability is recognized as tax deductible cost but not paid within 30 days (or 90 days in some cases), the taxpayer is obliged to make a corresponding reduction of deductible costs for the unpaid amount.
This mechanism was designed to eliminate tax arrears, whereas in practice it has become real obstacle in a day-to-day operations for the taxpayer. Therefore, starting from the 1 January 2016 those regulations are to be waived and in the effect, the liabilities will be recognized as tax deductible costs on general basis irrespectively to whether they are paid or not.
The new rules implement also transitional provisions, which state that taxpayers who reduced the deductible costs or increased revenues by the end of 2015, and subsequently settled the unpaid amounts in 2016 will still be able to increase their deductible costs (decrease revenues) .
