Tax customs & excise /

Limitation of tax depreciation in real estate companies

Some of the tax changes within the scope of the Polish Order governmental programme may exert an adverse impact on real estate trade.

The changes present a limitation in the recognition of tax depreciation of real estate assets in real estate companies as a tax cost.
According to the wording of the altered provision of Article 15 section 6 of the CIT Act and Article 22 section 8 of the PIT Act, the possibility of treating depreciation write-offs as tax costs in real estate companies will be limited to the value of depreciation write-offs made in accordance with accounting regulations and which lower the financial result in a given year. This change means that tax depreciation of real estate will not be possible if a real estate company values its real estate according to market prices.

Depreciation write-offs will be possible to be deducted only by these real estate companies which value its investment buildings as fixed assets.

Author team leader DPG Tax
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