Currently, objects, identified as structures related to the business activity of a given taxpayer, are subject to 2% Real Estate Tax (“RET”) paid annually. This taxation is based on the depreciation value of the given object for income tax purposes.
Due to the ambiguity of the provisions, it is not clear as to which objects are subject to RET. Consequently, this issue has been the matter of numerous disputes between taxpayers and the Polish tax authorities.
Groundbreaking Judgment on Polish Real Estate Tax
The Polish Constitutional Tribunal (“Tribunal”) has issued unprecedent judgment concerning real estate taxation of structures. The current tax provisions concerning taxation of structures will be repealed. A brand new system of taxation of structures will be in force starting from 1st January 2025.
What has changed?
On July 4th, 2023 the Tribunal issued a judgment in which it found the legal definition of the structure for Real Estate Tax purposes as unconstitutional. Moreover, the Tribunal has stated that the relevant tax provisions will cease to apply within 18 months from the date of publishing the judgment in the Journal of Laws.
Therefore, it is expected that starting from 1st January 2025, a brand new regime of RET on structures in Poland will come into force. So far, no draft legislation has been proposed by the Polish lawmakers.
What can Peterka&Partners do for you?
Given that the RET on structures could be a major tax burden, each RET payer should analyze whether the judgment of the Tribunal may affect their tax position.
The Polish Peterka&Partners office has considerable experience in tax advisory concerning RET, including handling disputes between taxpayers and the tax authorities.
Specifically, the Polish Peterka&Partners team may assist you in:
⎯ analyzing the impact this judgment could have on the way your structures are taxed;
⎯ assessing the potential tax savings to be achieved in the area of RET;
⎯ complying with the new real estate tax provisions once the draft legislation has been published.
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This article was prepared by Filip Biegun, Tax Advisor, Of Counsel at PETERKA & PARTNERS Poland. No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein. only and may not be considered a legal opinion or advice.