Thanks to OW Tax's support, one of our clients regained more than 17 million PLN of overpaid CIT for the years 2020-2023. In addition, thanks to the corrections submitted and the tax losses declared, the company may obtain additional tax savings in the coming years. What exactly did our support in this case look like?

 

The project started with a tax audit

The case involves one of our long-standing clients in the automotive industry, which operates under a Special Economic Zone (SEZ) permit. Thus, a significant part of the company's income was exempt from CIT. Significantly - the client had been using factoring (which primarily covered SEZ sales) for many years.

During the tax review, we signaled an opportunity for the company to obtain additional (non-obvious) tax benefits thanks to factoring. However, this would require a change in the approach to declaring revenues and costs related to factoring based on General Tax Ruling dated February 15, 2021. (No. DD5.8201.11.2020) and a narrow understanding of the SEZ exemption.

The change in approach was intended to have 2 main effects:

A preliminary tax calculations confirmed that this approach would achieve both intended effects. What's more, the company would recognize tax losses in its taxable operations that could be utilized in the future.

We secured this approach with a tax ruling obtained in record time (just 3 weeks). Based on it, we prepared for 2020-2023, along with corrections to CIT returns. After multiple exchanges of correspondence with the tax authority, we received information that the corrections had been accepted and the overpayment had been granted in full.

 

What make this project unique?

In addition to the amount of tax recovered, this project is distinguished by two things.

First, it all started with a tax review. This shows that a well-conducted review is not only a verification of the accuracy of the accounts, but also a good opportunity to find tax savings.

Secondly, the development of the concept itself required expert knowledge of income taxation of entities benefiting from SEZ exemptions. Our experts used this expertise and successfully completed the project.

The client was supported by Karol Niemiec and Damian Kłosowicz. Congratulations!