Loss on Non-Deliverable Currency Options or Forward Contracts in Corporate Income Tax and the Notion of Expense Related to Acquisition of a Derivative

Authors

  • Łukasz Karczyński University of Gdańsk

Keywords:

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

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 second 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 if the aforementioned losses may be regarded as expenses related to acquisition of these derivatives (excluded from tax-deductible expenses). The conducted analysis suggests that the expenses made to pay the losses cannot be regarded as such expenses, so they should be regarded as tax-deductible expenses if there are no other obstacles.

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References

Godyń J., Keler G., Zaliczenie do kosztów uzyskania przychodu wydatków związanych z nabyciem instrumentów pochodnych – wybrane problemy, „Monitor Podatkowy” 2011, nr 11.

Jurkiewicz R., Pochodne instrumenty finansowe w podatku dochodowym od osób prawnych, „Prawo i Podatki” 2010, nr 11.

Karczyński Ł., Strata na „toksycznych” opcjach walutowych i kontraktach terminowych forward jako koszt uzyskania przychodu osoby prawnej – ujęcie ogólne, „Financial Law Review” 2015, nr 1.

Romanowski M., Charakter prawny kontraktu opcyjnego, „Przegląd Prawa Handlowego” 1999, nr 5.

Published

26.06.2016

How to Cite

Karczyński, Łukasz. (2016). Loss on Non-Deliverable Currency Options or Forward Contracts in Corporate Income Tax and the Notion of Expense Related to Acquisition of a Derivative. Financial Law Review, 1(2), 1–14. Retrieved from https://czasopisma.bg.ug.edu.pl/index.php/flr/article/view/936

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Articles