The new rules concerning income tax on building regulations will enter into force on January 1 2019, with some relating to 2018.
The main amendment is that income tax on buildings will apply to all buildings owned (wholly or partially) for rent or other forms of payable use, excluding only residential properties included in governmental or local social housing programmes. The tax will continue to apply to all buildings that are fixed assets regardless of statistical classification, including warehouses, production facilities, offices and shopping centres. Income tax on buildings will be due if the rented area exceeds 5% of a building's total usage area. The tax does not apply to buildings used mainly for an entity's own needs.
The tax base will be the sum of initial tax values of buildings less than PLN 10 million ($2.7 million). The tax will apply to all buildings belonging to a given taxpayer, regardless of quantity and value (in 2018 a PLN 10 million tax allowance applied to each individual building). Regarding related parties, the PLN 10 million is divided proportionally according to the income from a given taxpayer's buildings to the income of the group.
In situations when the amount of corporate income tax is lower than tax on buildings or a taxpayer declares a tax loss, the income tax on buildings will be refunded if the tax authorities conclude that there were no irregularities in the settlement of this tax and the correct settlement of income tax (especially relating to debt financing costs) was made. The refund is made on the request of the taxpayer only. This provision has been introduced with retrospective effect from January 1 2018.
The new regulations introduce the targeted anti-avoidance rule (TAAR), whereby the tax is also applicable if the taxpayer transfers ownership of the building or provides it for use under a leasing contract to avoid income tax on buildings (unless doing so is justified for economic reasons).
Neither the 0.42% per annum tax rate nor the right to deduct income tax on buildings from monthly income tax advances were changed.