Ewelina Buczkowska, Maja Dajczak
The article discusses the tax treatment of lease rent expenses incurred when building tangible assets, such as wind farms, on leasehold land. This matter is not expressly regulated by law and splits tax authorities in their interpretation rulings. Some rulings say that such a lease rent should be capitalised as the cost of the asset because there is a clear connection between the erection of the asset and the money paid in consideration for the lease. If it were not for the project (such as the building of a wind farm), there would be no need to acquire land and, hence, to acquire and pay for title to it. According to the other approach, rent expenses are what is called an indirect cost deductible already when incurred. These latter rulings endorse a view that such expenses should not be capitalised on the asset because they are not listed among expenses constituting the manufacturing cost. Rather, they are connected with maintenance of the property and as such should be treated as part of fixed costs the taxpayer pays on assets under his control.