Hypothetical interest - what is it?

Hypothetical interest is a special tax relief for CIT taxpayers. It applies only to those taxpayers who have allocated the company's profit to reserve or supplementary capital or contributed to the company. This relief is based on the calculation of hypothetical interest that burden tax costs and reduce the tax. Hypothetical interest is a kind of incentive for companies to increase their equity capital. As a consequence, they are to lead to limiting the share of foreign capital in the structure of the company's financing sources.

Who and when can take advantage of the discount?

The relief will be available to companies which, by a resolution of the shareholders' meeting adopted at the earliest in 2019, made additional capital contributions or retained the company's profit generated in 2018. Generally, hypothetical interest is included in tax expense in the year in which:

  • a resolution was adopted to transfer the profit to supplementary or reserve capital or,
  • the adopted surcharge was credited to the company's account.

However, the hypothetical interest is included in the 2020 tax deduction for the first time. In other words, in 2020, a tax deduction for retained profit generated in 2018 and 2019 can be included in tax costs. Additionally, it is worth noting that the hypothetical interest charges tax costs during the year, which reduces tax advances. The relief is also available in the next two immediately consecutive tax years.

In order to take advantage of the relief, however, several conditions must be met:

  1. surcharges or retained profit cannot be used to cover the balance sheet loss.
  2. the reimbursement of subsidies or the division and payment of the retained profit may take place after 3 years at the earliest. (counting from the end of the tax year in which the subsidy was paid or a resolution was adopted to retain the profit)
  3. the amount of the relief in a given tax year may not exceed PLN 250.000.

ATTENTION!! When should the hypothetical accrued interest be adjusted?

  • When the condition no. 2 is not met and the subsidies are reimbursed or the retained profit is paid within 3 years. In this case, a correction should be made to the tax relief, recognizing the amount of the deducted tax costs as tax revenues, in proportion to the value of the surcharge returned or the retained profit paid. Adjustments are made in the tax year in which the subsidies were returned or the retained profit was paid.
  • If, after applying the tax relief, a balance sheet loss will arise in subsequent tax years, which will be covered with the supplementary capital - the company loses the right to the hypothetical interest in its entirety, recognizing it as tax income. Corrections are made in the tax year of adopting a resolution on covering the loss with supplementary capital.
  • In the case of transformation of the company - which has benefited from the preferences - into a company without legal personality or acquisition of this company in the form of a merger by acquisition or in the form of a division before the expiry of 3 years. (counting from the end of the tax year in which the subsidy was paid or a resolution was adopted to retain the profit). Then, on the day preceding the acquisition or transformation, the revenue is determined in the amount corresponding to the tax costs previously deducted.

How to calculate the hypothetical interest?

The value of the hypothetical interest is the amount equal to the product of the NBP reference rate (in force on the last business day of the year preceding the tax year) increased by 1 percentage point and the amount:

  • additional payment made to the company or,
  • profit allocated to supplementary or reserve capital.


  • NBP reference rate of December 31, 2019. is 1,5%.



Legal basis:

Art. 15cb of the Act of February 15.02.1992, XNUMX on corporate income tax

Basic NBP interest rates in 1998 - 2020