ATAD 2: Preventing hybrid mismatches

New taxes

29 December&12b00+01:00;2020

ATAD 2: Preventing hybrid mismatches

NOTE: From 1 January 2021, amendments to the CIT Act regarding the prevention of hybrid mismatches with third countries, made as a result of the implementation of ATAD 2, will apply to revenues (income) generated after 31 December 2020.

These amendments exist to remedy cases where, due to differences in tax treatment of an entity or instrument under tax rules, there occurs:

  • double deduction – where the same payment is deducted from the tax base in more than one jurisdiction;
  • deduction without inclusion, i.e. deduction of a payment from the tax base in one jurisdiction without the corresponding inclusion of this payment in the taxpayer’s tax base in another jurisdiction.

In the event of a mismatch, the CIT Act requires:

  • restriction (in certain cases) of the right or obligation to include expenditures incurred in deductible costs;
  • obliging the taxpayer to recognize receivables in revenues.

To prepare for the changes, international financial structures should therefore be reviewed – among other things, to confirm that the expenditures incurred can be included in tax deductible costs.


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Agata Dziwisz-Moshe

Agata Dziwisz-Moshe

Advocate, Partner, Head of Tax Practice

+48 668 886 370