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Factoring releases from the costs adjustment

The Tax Chamber in Warsaw in the interpretation dated 29th December 2014 confirmed that in the case of payment of the invoice made by the reverse factoring, the entrepreneur will not suffer the negative consequences of the provisions designed to prevent congestion payments. As a consequence, the use of factoring shall exempt entrepreneurs from the obligation of making costs adjustment to revenues.

The abovementioned position was firstly expressed by the Court of Appeal in Wrocław in judgment of 20 March 2014 (ref. act I SA / Wr 76/14). In said judicial decision, the Court of Appeal held that, in the case of a so-called reverse factoring in the time of payment made by the factor the creditor shall be deemed satisfied and the debt expired. Such liability should be regarded as "settled" under art. 15b of the Act of 15 February 1992 on income tax from legal persons.

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