ARTICLE
17 November 1997

Giving of goods "Free of Charge"

K
KPMG

Contributor

Poland Finance and Banking
In a recent letter, the Ministry of Finance has clarified the question of giving over goods "free of charge". This occurs where, for example, a producer of cold drinks equips retailers with fridges to promote its products.

In the opinion of the Ministry of Finance, the treatment of such goods as being given for use free of charge is incorrect. In such a situation, the cold drinks producer clearly increases his sales by making fridges available to retailers. This applies regardless of the legal form of the agreement made between producer and retailer, since, in accordance with the Civil Code, it is the intention of the parties which should be taken into account, and not the literal text of a contract.

This means that producers "may, for the purposes of corporate income tax, include all costs incurred which influence (or may influence) the level of revenues achieved from the economic activity carried on".

Tax laws and practise are constantly being revised and, whilst every effort is made to ensure that the information in this tax newsletter is accurate and timely, no decision should be taken on the basis of the information herein without first consulting with KPMG Polska.

Should you have any questions in relation to the above issues, please contact:

Oliver Sinton
KPMG Polska
LIM Center - Marriott Hotel - IX floor
Al. Jerozolimskie 65/79
00-697 Warsaw, Poland
Tel: +48 (22) 630 7236
Fax: +48 (22) 630 6355

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