Tax on commercial properties will not bypass warehouse facilities

European Commission's reservations

The tax on commercial real estate introduced in 2017 did not please the European Commission, which accused the Polish authorities that through the selectivity of the act (taxation applies only to shopping malls and office buildings), they are trying to introduce the previously questioned retail tax through the back door.

Changes in the scope of taxation

According to the prepared changes, the income tax will cover all buildings, regardless of their type, provided that they have been made available for use in whole or in part based on a lease, tenancy, or other agreement of a similar nature. Therefore, facilities or parts thereof used for the taxpayer's own purposes have been excluded from taxation.

The 10 million PLN limit will apply to the taxpayer

Another change concerns the threshold from which the tax is applied. In the original version, only buildings with a value exceeding 10 million PLN were subject to taxation. After the amendments are introduced, the 10 million PLN limit will apply to the taxpayer, regardless of the number of buildings they own. The legislator has also introduced additional safeguards against possible tax optimizations (in particular through economically unjustified transfer of building ownership).

Correction of provisions allowing for tax optimization

Another significant change is the correction of an erroneous provision in the original version of the act, thanks to which entities could lower their CIT taxation. Specific provisions of the act have been clarified, so that the accidentally introduced tax optimization will no longer be possible.

When will the changes come into force?

The draft of the changes has already passed its first reading in the Sejm on April 12, 2018, as a result of which it was referred to the Public Finance Committee. However, it can be expected that the legislative process will be efficient and the prepared changes will enter into force as early as May.