New commercial property tax in Poland

Since January 2018, the owners of  the commercial buildings are obliged to pay so-called the ‘minimum tax’. On June, 2018, the amendments specifying the application of  minimum tax were introduced to Polish law. All of these changes make relatively huge impact on the commercial real estate market in Poland.

Minimum tax apply to the buildings (or their parts) that are given for use under a rental, lease or other agreement of a similar nature. It means that among others: shopping centers, department stores, independent boutiques are subject to taxation. The vacant areas should not be subject to the minimum tax. 

The tax rate is 0.035% of the tax base for each month. Basically, the tax base is the initial value of buildings determined in accordance with the regulations on tax depreciation. 

The rules provide for a threshold, i.e. a tax-free limit in the amount of PLN 10 million. As a result of the introduced amendments, the exemption threshold  would be applicable to the taxpayer regardless of the number of buildings owned (single exempt amount for the taxpayer for whole portfolio of buildings held by the taxpayer). In the case of related parties, the amount of PLN 10 million will be divided into these entities.

The new regulations contain also a clause on tax avoidance. The taxpayer, whose without any economic reason,  transfers all or part of the building's ownership or joint ownership (or gives it to use under the lease agreement) will be subject to taxation.

It is worth noting that the minimum tax is an income tax paid in addition to ordinary CIT. However, provisions provide the institution of tax refund in case of the excess minimum tax over regular CIT liability.