A recent decision in the UK dated 21 August means that UK companies lending at below market rates of interest to overseas associates need to review their tax arrangements as the tax authorities will impute the difference in interest income to the lender.

Should such a loan be made for example to a subsidiary in Poland, the Polish tax office may impute the difference in interest as a taxable benefit to the Polish company.

Tax laws and practise are constantly being revised and, whilst every effort is made to ensure that the information in this tax newsletter is accurate and timely, no decision should be taken on the basis of the information herein without first consulting with KPMG Polska.

Should you have any questions in relation to the above issues, please contact:
Oliver Sinton
KPMG Polska
LIM Center - Marriott Hotel - IX floor
Al. Jerozolimskie 65/79
00-697 Warsaw, Poland
Tel: +48 (22) 630 7236
Fax: +48 (22) 630 6355

This information was correct as of 2 October 1998.