Information on receipt by the Company of an individual interpretation of tax law regulations concerning corporate income tax
Legal basis: Article 17(1) MAR – Confidential Information.
Content of the report:
Management Board of Ten Square Games S.A. (hereinafter referred to as “the Company”) informs that today the Company received an individual interpretation of tax law regulations concerning corporate income tax and issues related to preferential taxation of income generated by intellectual property rights – IP BOX.
In an individual interpretation, the Director of the National Fiscal Information (hereinafter referred to as “Authority”, “NFI”) confirmed that the Company was right on two of the three issues presented to the Authority in the application for an interpretation.
The Authority declared that the Company was right as regards the determination of the following:
1_ that the Applications, i.e. on-line games created and delivered by the Company, in particular for Internet browsers and mobile devices, including Additional Functions such as: virtual objects available in the Applications, additional locations in the Applications, made available as part of the Application in exchange for micropayments – within the IP Box regulations – are entirely computer programs created by the Company,
2_ that the costs incurred by the Company related to the Applications and Additional Functions constitute the costs of research and development activities related to the development of the Applications, which in the types listed above should be classified as eligible costs and as such subject to a tax relief.
In its application, the Company also inquired about the qualifications of the revenues but the Authority refused to issue an interpretation of this matter.
Taking into account the above cost-related interpretation received from the NFI and the absence of any interpretation related to revenue, the Management Board of the Company commences the implementation of the relief concerning IP BOX. However, it cannot precisely determine the scale of the positive impact which the NFI interpretation received today should have on the Company’s net result. The Management Board, in cooperation with advisers, is working on the development of an appropriate model for the recognition of revenues related to qualified rights enabling the full use of the relief concerning IP BOX in 2019 and subsequent years.