Tax customs & excise

Taxation on private tenancy in Poland

Taxation on private tenancy in Poland

Provincial Administrative Court in Wroclaw stated short term tenancy conducted by private person cannot be treated by tax authorities as hotel service and is not an activity conducted in an organized and continuous manner, therefore the income derived therefrom may be taxed by a lump sum at the rate of 8.5%.

Case study

The case in which judgment was issued was initiated by the owner of a flat who provides short-term tenancy services in one of touristic towns in Poland. He filled an interpellation to Polish Tax Authorities in which asked about proper manner of taxation of this kind of activity. Polish Tax Authorities issued a response in which questioned the 8,5% taxation rate and considered short-term tenancy as business activity. The flat owner filled a complain to the court.

Judgment

The court clearly indicated that short-term tenancy cannot be treated as a hotel service. In addition, the court pointed that the flat owner does not conduct his activities in an organized and continuous manner, therefore it is not a business activity. As a result, the source of the income of flat owner shall be considered as a private tenancy and the 8.5% tax rate shall be applicable.

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