Loan Currency Conversion Does Not Generate Any Foreign Exchange Differences

Ruling description

In its ruling handed down on 9 December 2015, in combined cases (case file no. III SA/Wa 293/15 and case file no. III SA/Wa 294/15), the Regional Administrative Court in Warsaw ("WSA") held that loan currency conversion does not generate any foreign exchange differences and is tax neutral.

The Company requested a tax ruling concerning corporate income tax. In its request, the company stated that it was a special purpose vehicle incorporated to implement a specific real estate development project. In connection with the project implementation, the company incurs various costs that are strictly related to the project. The investment is financed mainly with funds originating from external sources in the form of contracted loans. The said loans were contracted in foreign currency and were credited to the company's bank account denominated in foreign currency.