Starting in the new year, business owners with real estate holdings in Poland will face significant changes, bringing about a potentially disruptive overhaul. In early December, the President signed an amendment to the Act on Local Taxes and Fees, equipping tax authorities with more effective tools for enforcing property tax collections. Additionally, new areas are now subject to taxation, meaning many companies will need to prepare for higher fiscal contributions.
This shift should prompt entrepreneurs to reevaluate their real estate holdings. Before filing their declarations, business owners must identify and inventory all their properties, then assess them in light of the new regulations.
Tax Authorities to Closely Monitor Compliance
The amendment was introduced in response to challenges in effectively collecting property taxes, as highlighted in reports by the Supreme Audit Office (NIK). It also signals that tax authorities will be scrutinizing compliance with the new regulations. Simply replicating last year’s tax declaration without proper review could lead to significant problems, including penalties for overdue taxes or criminal charges for submitting inaccurate declarations.
“This will not be just another routine property tax declaration,” explains Szymon Mojzesowicz from consultancy firm Lege Advisors. “To comply with the new tax conditions, businesses will need to determine the actual state of their assets, verify registry data against reality, and classify and appraise structures for the tax declaration according to updated regulations.”
For medium and large industrial facilities, Mojzesowicz predicts that external specialists in property valuation will often be indispensable.
Numerous Changes and Ongoing Disputes
The amended act introduces a plethora of changes, some of which clarify previous definitions of taxable structures. Special attention should be paid to the act’s appendix, which lists structures subject to taxation (though it is not an exhaustive catalog under the definition of “structures”).
The appendix includes detailed examples, such as components of wastewater treatment plants, and ambiguous entries like “freestanding industrial installations permanently attached to the land other than those listed in the appendix.”
“Practical concerns will likely arise around taxable ‘structures serving as building devices,’ as well as ‘technical equipment in building parts’ and ‘foundations for technical machinery,’” says Norbert Banaszek, also from Lege Advisors. “Under the legal definition, a building device is any technical equipment associated with a building or structure that directly enables its intended use.”
Structures must result from construction works to be taxable, but Banaszek reminds that construction works also include assembly operations. Moreover, structures within already-taxed buildings will also be subject to taxation.
The taxation of “structures within buildings” has been a contentious issue for years. Despite this, the legislature has not excluded this category of structures from fiscal obligations. As a result, disputes over the taxation of costly technical devices, such as transformers (even those within buildings), are likely to continue.
Will Businesses Have Enough Time?
“Following the amended regulations, every entrepreneur with real estate must analyze the laws, conduct an audit, and prepare new documents,” warns Mojzesowicz. “This will require training current employees responsible for declarations or even hiring new staff. The question remains: will there be enough time to meet the deadlines?”
Recognizing the challenges posed by the new rules, the legislature has allowed for an extension of the declaration deadline to March 31, 2025, under certain conditions. Businesses must submit a notification and pay property taxes for the first months of 2025 based on the average monthly amount paid in 2024. However, even with this extension, many worry that the time may still be insufficient.
Source: CEO.com.pl
