Prawnopodatkowe ograniczenia swobody finansowania podmiotów zależnych
Tax Law Provisions Restricting the Freedom of Financing of Subsidiaries

Summary/Abstract: The article deals with domestic tax law provisions which, in authors’ opinion, may lead to restricting freedom in the financing of subsidiaries. An example of such tax law regulations, amongst other, are domestic thin capitalization rules (TCRs) and taxation of interest payments derived from obligatory contributions in cash provided by shareholders to the equity capital of the company. These rules provide for certain and significant limitations in the level of debt-financing provided by shareholders to its subsidiary compared to equity capital contributed to the subsidiary. The authors analyze the scope of application of the domestic TCRs in comparison with similar provisions adopted by the other EU Member States and their practical impact on the domestic and cross-border business activity in the light of their conformity with the EU Treaty – Fundamental Freedoms and analyze the practical issues concerning the taxation of contributions in cash. The tax rules governing the taxation of interest payments, both derived in thin capitalization situations and from obligatory contributions in cash may lead to the significant erosion of the taxable basis of the subsidiary and is seen as an example of tax avoidance.

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