One of the possibilities of debt relief is the bank’s resignation from all or part of its receivables. This happens when the bank states that the borrower’s situation is so bad that there is no chance of paying off the debt. However, the Ministry of Finance recognizes such aid for those in debt as income and makes them pay tax.
According to the Ministry of Finance and the Supreme Administrative Court
When the bank agrees that the client should not return the money for the loan, regardless of whether it is the principal amount or interest – there is a capital gain. In the light of the Act of February 15, 1992 on corporate income tax, such an extension must be considered as taxable income.
The cancellation of interest may also be considered as tax revenue from a different point of view. This type of debt relief means that the debtor uses his or her property free of charge. For these reasons, this issue should also be considered through the prism of the so-called gratuitous benefits, which – pursuant to art. 12 paragraph 1 point 2 of the Act of February 15, 1992 are included in the category of tax revenues.
However, many experts have a different opinion. The Ombudsman also agrees with them and believes that it would be possible to introduce a tax exemption in connection with the cancellation of a loan or interest.
Everyone pays attention to a very important aspect of the matter
Namely, banks give up their receivables only in exceptional, well-documented cases. It is about people whose situation is so difficult that they cannot expect to pay back the debt. Therefore, most often, they cannot be expected to be able to pay the redemption tax. Consequently, taxation hinders the restructuring of debts and the conclusion of agreements between creditors and debtors. Unfortunately, until now the finance minister has not seen the need or the possibility of change.