Hedging of price elements – regulatory and tax considerations

Summary. Due to the fact that the market price of raw materials has indirect or even direct impact on goods and services’ price, hedging of price elements play a key role in a successful business. The purpose of this article is to present available instruments to address or even eliminate raw material price level insecurity, in particular through the acquisition off financial instrument, like derivatives. The purpose of this article is also to present the theoretical tax implications of hedging of price ele-ments, and to analyse cash flows as a price adjustment mechanism.

Keywords: MIFID2, hedging, derivatives, tax, financial supervision1

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Katarzyna Knawa*

Konrad Stolarski**

Contributing Advisors