Loss on „Toxic” Currency Options and Forward Contracts as a Tax-Deductible Expense in Corporate Income Tax – General Issues

Authors

  • Łukasz Karczyński University of Gdańsk

Keywords:

currency option, forward contract, tax-deductible expense, corporate income tax, derivative

Abstract

Due to financial crisis many entrepreneurs suffered heavy losses on currency options and forward contracts. Tax authorities tend to disallow deduction of those losses from the taxable income. Many cases ended up in administrative courts, resulting in judicature controversies on the issue in question. This paper is the first of four in a cycle. The aim of the whole cycle will be to analyze deeply these controversies and suggest the proper interpretation of the legal provisions, determining whether losses on currency options and forward contracts should or should not be regarded as tax-deductible expenses. The aim of this paper is to determine the scope of the problems to solve as well as to analyze the legal character of the loss on non-deliverable currency options and forward contracts. Therefore this legal character has been determined in the light of Polish corporate income tax act. What is more, the problems with the interpretation of these losses as indirect deductible expenses have been solved.

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References

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Published

16.03.2016

How to Cite

Karczyński, Łukasz. (2016). Loss on „Toxic” Currency Options and Forward Contracts as a Tax-Deductible Expense in Corporate Income Tax – General Issues. Financial Law Review, 1(1), 11–22. Retrieved from https://czasopisma.bg.ug.edu.pl/index.php/flr/article/view/931

Issue

Vol. 1 No. 1 (2016)

Section

Articles

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