LPP Disputing Polish Tax Assessment From Trademark Licensing

Polish garment manufacturer LPP SA Capital Group is contesting a corporate income tax audit charging it with 16.4 million zloty ($4.3 million) in tax liabilities for 2012.

With interest, the payment due could climb above 20 million zloty, making it one of the largest tax assessments for a company to face in Poland’s modern history, not counting value-added tax fraud investigations, local tax practitioners said.

The audit centers on whether LPP overstated its tax-deductible costs by including trademark licensing fees paid to its Cyprus and United Arab Emirates (UAE) subsidiaries. It is also significant as it may determine the ability ...