| Autor: Marcin Jamroży | 323 |
Strony: 323-334
pełen tekst
SETTLING OF LOSSES OF PERMANENT ESTABLISHMENT IN THE STATE OF RESIDENCE
Summary
The lack of possibility to settle losses of foreign permanent establishments enhances the risk of entrepreneurs conducting cross-border activities. When applying the exemption method, income attributed to the permanent establishment is not included in the tax base of the entrepreneur in the state of his residence, so there is no systematic arguments to account foreign losses. The European Court of Justice and the Polish administrative courts are in favor of deducting of only the final losses which cannot be used anymore in the state of source. The adoption of the mechanism of the temporary deduction of foreign losses in the state of residence (the so-called recapture mechanism) would significantly improve conditions of the Polish entrepreneurs operating in the EU market.
pełen tekstSETTLING OF LOSSES OF PERMANENT ESTABLISHMENT IN THE STATE OF RESIDENCE
Summary
The lack of possibility to settle losses of foreign permanent establishments enhances the risk of entrepreneurs conducting cross-border activities. When applying the exemption method, income attributed to the permanent establishment is not included in the tax base of the entrepreneur in the state of his residence, so there is no systematic arguments to account foreign losses. The European Court of Justice and the Polish administrative courts are in favor of deducting of only the final losses which cannot be used anymore in the state of source. The adoption of the mechanism of the temporary deduction of foreign losses in the state of residence (the so-called recapture mechanism) would significantly improve conditions of the Polish entrepreneurs operating in the EU market.