Taxable costs of capital increase

Which, if any, expenditure related to the increase of share capital of a company constitutes its taxable costs has always been controversial. The High Administrative Court has issued a resolution with this regard. Expenditure directly related and essential for increase of capital, such as notarial and court fees, do not constitute taxable costs and do not decrease the taxable income.

On the other hand expenses related to increase of capital, such as advisory, legal, financial or marketing services, can be considered general costs and decrease the tax base. This part of a resolution may be hard to accept for the tax authorities. Until now they often treated also this group of costs as nondeductible.