FINANCE MINISTRY SPEAKS ABOUT MINIMUM INCOME TAX ON COMMERCIAL PROPERTIES

We wish to alert you to a recent communiqué from the Finance Ministry ("FM") in relation to what is called the minimum income tax on commercial properties, which Poland introduced as of 1 January 2018.

In accordance with the new law, taxpayers who hold commercial properties as their tangible assets must assess an extra taxable basis in relation to any such property whose accounting cost exceeds PLN 10 million. The taxable basis must be determined as at the first day of each month and equals the accounting cost of the property (as per the taxpayer's accounting records) less PLN 10 million. The tax is 0.035% of the taxable basis monthly.

As this tax is payable monthly, just as the general corporate income tax (CIT), the law helps taxpayers to avoid having to make two monthly tax payments in that there is an option to:

  • deduct the tax on commercial properties from the general monthly CIT payment;
  • altogether withhold a monthly payment of this tax if it is lower than the amount of CIT payable for that month.

After the media offered an erroneous interpretation of this regulation, FM explained that these are actually two separate options that are not exercisable at the same time, i.e. taxpayers may not deduct the tax on commercial properties which they have not paid due to it being lower than their monthly CIT payment.

FM says that a taxpayer has two options in relation to the payment of his monthly tax on commercial properties:

  • either pay that tax and then deduct it from his monthly CIT payment; or
  • pay his monthly CIT in full if his tax on commercial properties is lower.

If this issue pertains to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

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