Investment purposes fund

Entities specified in Article 15(1hb) of the CIT Act are entitled to establish a investment purposes fund.

In order to deduct costs prior to the commencement of the investment, the taxpayer must fulfil a number of conditions altogether. The solution may be used by an entity that:

• derives at least 50% of its revenue: from receivables, from interest and benefits from all types of loans, from the interest part of lease instalments, from sureties and guarantees, from copyrights or industrial property rights, including from the sales of such rights, from the sales and exercise of rights from financial instruments, from transactions with related entities within the meaning of Article 11a(1)(4) if no or little economic added value is generated in connection with such transactions;
• employs, on the basis of an employment contract, at least 3 FTEs for at least 300 days in a tax year and, where the tax year is not a period of twelve consecutive calendar months, for at least 82% of the days falling in the tax year, or
• incurs monthly expenditure in an amount of at least three times the average monthly salary in the enterprise sector for the payment of salaries to at least 3 natural persons employed under a contract other than an employment contract.
• does not prepare financial statements in accordance with IAS pursuant to Article 45(1a) and (1b) of the Accounting Act (Article 28j(1)(6) of the CIT Act) during the period of use of the investment purposes fund preference.