Tax customs & excise

Tax advisors of our Law Firm inform that as per newest Supreme Court ruling not everyone will pay a lower tax for industrial silos, elevators or tanks

Property tax for building objects

The Supreme Administrative Court in Warsaw (Supreme Administrative Court) has resolved the existing disputes in the jurisprudence regarding the criteria for taxation with real estate tax for building objects such as silos, elevators or tanks.

In the resolution of seven judges of September 29, 2021, file ref. III FPS 1/21 The Supreme Administrative Court stated that a building object which is a structure within the meaning of the Polish Construction Law may be taxed with real estate tax as a building and not as a structure only under strictly defined conditions.

Building in Polish Construction Law

In accordance with Polish Law the basic condition for taxing a structure, just like a building, is that such a structure has the statutory criteria of the building, i.e. a permanent relationship with the land, separation from space by means of building partitions, having foundations and a roof. In addition, the distinguishing feature of such a building must also be the usable space.

Explanations of Polish Supreme Administrative Court

In the recently published written justification of the resolution, the Supreme Administrative Court stated, inter alia, that when qualifying a given construction object for the purposes of real estate tax, the key is to determine whether the main architectural and technical (structural) parameter of the object is its usable area or capacity. Thus, for the purposes of taxation with real estate tax, a classic warehouse building should be perceived as the object of taxation differently, which is used in economic practice as a tank (e.g. grain and other loose materials), but its technical distinguishing feature is the usable area (it should be subject to taxable as a building), and differently a building structure which was designed and implemented only as a container (tank) of specific loose, liquid or gaseous products.

Real estate tax on silos, elevators and tanks

Therefore, the position of the Supreme Administrative Court allows for the taxation of such buildings as silos, elevators or other similar tanks as a building only if the usable area is their distinguishing feature. It seems that in practice it will apply to a relatively small number of objects. In the vast majority of cases, silos will be subject to real estate tax in the amount of 2% of their initial value for depreciation. Usually it is equal to the cost of acquiring or producing a structure.

Time to revise you Polish tax returns

Owners of silos, elevators or tanks should review their real estate tax statements in recent years to determine whether their facilities have been taxed correctly. Perhaps they will be entitled to correct an incorrectly submitted declaration and apply for a refund of overpaid tax. A worse scenario is also possible, according to which the municipality finds underpayment of tax due to incorrectly submitted declaration and demands payment of the outstanding tax. It is worth being prepared for such an eventuality.

As Tax specialized Law Firm, our tax attorneys remain to your disposal in case of any questions regarding real estate tax for construction objects.

Author team leader DKP Legal Marcin Kręglewski
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