On November 27, 2024, the President signed law amending the Law on Agricultural Tax, the Law on Local Taxes and Fees, the Law on Forestry Tax and the Law on Stamp Duty (the “Law”). The amendments may have significant implications for businesses, particularly those in the telecommunications and energy sectors.
Key Changes:
- New definitions of “building” and „bulding”
The Law introduces legal definitions of “building” and “structure” directly in the Law on Taxes and local fees, eliminating references to the construction law. The new definitions expand the catalog of building structures, which could lead to an increase in the number of buildings taxed as structures.
- Expanded Catalog of Building structures:
The Law lists 28 categories of facilities that will be considered structures, including sports facilities, water treatment plants, wastewater treatment plants, ports, power lines, bridges, overpasses and landfills. In addition to the objects enumerated in the appendix to the Act, the construction parts of wind, nuclear and photovoltaic power plants, as well as foundations for machinery and technical equipment, among others, should also be considered structures in light of the amendment.
- Installations and equipment that enable the structure to be used for its intended purpose
The amendment provides that installations and equipment, directly related to a building or facility listed in the annex to the Law, necessary for their use in accordance with their intended purpose, are also part of a structure.
- Raising of a building as a result of construction works
According to the Law, structures will be objects raised as a result of construction work, including when they are part of an object not listed in the Law, replacing the previous premise from draft bill, of raising with use of a building materials.
- Placement of the structure in the building:
Placing a structure or part thereof in a building does not mean that only the building is subject to taxation. If a structure or a part of a structure that is not an integral part of the building is located in the building, it can be a taxable object separate from the building.
- Deadline for filing tax returns
The Law provides for a transitional provision under which certain taxpayers will have the opportunity to file their real estate tax returns for 2025 by an extended deadline of March 31, 2025, provided they meet the conditions set forth in the Law. In order to take advantage of the extended deadline, it will be necessary to file an appropriate notice with the relevant tax authority. Regardless of the extended deadline for filing returns, taxpayers will be required to make ongoing monthly tax payments.
Other changes:
- Garages in residential buildings will be taxed at the rate applicable to residential buildings.
- Railroad infrastructure will not benefit from the tax exemption for freight terminals.
- Buildings and structures at public-use airports will be exempt only to a limited extent.
Potential Risks:
- The changes mogą lead to an increased tax burden for businesses.
- The new regulations may cause significant problems of interpretation, which could result in an increased number of disputes with tax authorities.
What’s Next?
The changes introduced follow the Constitutional Court’s judgment of July 4, 2023 (SK 14/21) and will come into effect on January 1, 2025.
Our team will keep you updated on their further development and provide assistance in interpreting and implementation of the new regulations.
Please feel free to contact us if you have any questions or need consultation.
