Calculation of the proportional deduction of tax paid abroad in the absence of a bilateral double taxation treaty – commentary to the Judgment of the Supreme Administrative Court of 4 March 2025, II FSK 755/22

The gloss is approving in nature and concerns the judgment of the Supreme Administrative Court of Poland of 4 March 2025 (II FSK 755/22), which resolves a legal issue regarding the method for calculating the limit of foreign tax credit by a Polish taxpayer in the absence of a double taxation treaty. The main thesis of the gloss indicates that both foreign revenues and the costs of obtaining them should be qualified exclusively under Polish tax law, and that it is inadmissible to combine revenue and income values calculated under different legal systems. The author approves the position of the Supreme Administrative Court, which accords primacy to the linguistic (literal) interpretation over the functional interpretation. The cognitive value of the gloss lies in highlighting the necessity of consistently applying domestic tax regulations in cross-border settlements in the absence of a bilateral double taxation treaty, as well as emphasizing the importance of tax information exchange between states for the effectiveness of the deduction mechanism.