Poland’s Ministry of Finance issued a guidance, on 12 September 2024, clarifying that goodwill acquired through non-monetary means – such as acquiring a business by extinguishing a loan – cannot be depreciated for corporate income tax purposes under Article 16b(2)(2) of the CIT Act.
Article 16b(2)(2)(a) of the CIT Act states that goodwill acquired from a sale transaction, where payment is in money, can be depreciated. However, since the article specifies a closed list of activities for depreciation, the concept of purchase cannot be extended to other acquisition methods, like accepting a business in lieu.
This interpretation of Article 16b(2)(2)(a) of the CIT Act clarifies that goodwill arising from acceptance in lieu cannot be equated with goodwill generated through purchase. Consequently, it cannot be depreciated under the provisions of the CIT Act.
