The Voivodship Administrative Court in Poznań in the judgment of July 29, 2010 (case file no.: I SA/Po 265/10) decided that a tax payer has the right to include paid contractual penalties among the tax deductibles. The court was considering the case of a contractual penalty paid in connection with an earlier termination of a lease agreement. If the termination of an agreement for a definite period is an act which is to minimize losses, the contractual penalty paid in connection with the earlier termination of such an agreement may be included in the tax deductibles of the lessee.

Contact person: Paweł Nowak, pn@pnplaw.pl