Tax on revenues on commercial buildings

11. December 2018 Poland

Important changes to tax on revenues from real estate are planned from 1 January 2019, which will involve a tax on income from ownership of most commercial buildings (the so-called “minimum tax”).

According to the current law the minimum tax covers only certain types of large commercial buildings. However, from 2019 the scope of taxation will be much broader. The key changes are as follows:

  • the minimum tax will cover all buildings located in Poland that are rented, leased or used on the basis of a similar agreement. Currently the tax only applies to office buildings, shopping malls and similar properties,
  • only residential buildings commissioned for use as part of government social programs will be exempt from taxation,
  • the PLN 10 million threshold, below which the minimum tax is not applicable, will be calculated per taxpayer not per building, which effectively lowers the threshold. For example, a taxpayer who owns 11 buildings of PLN 1 million value each is currently not subject to minimum tax because the threshold is calculated per building not per taxpayer. From 2019 the same taxpayer will have to pay the minimum tax,
  • introduction of a special anti-abuse clause specifically related to the minimum tax.

The tax rate of 0,035% remains unchanged. The new law will take effect on 1 January 2019.

How ASB Tax can support you

From 2019 the minimum tax will affect a large number of entities owning commercial buildings given both the wider scope of properties subject to the tax and the lower thresholds. This means that real estate owning entities should carefully review their portfolio and check if the revised minimum tax impacts them. ASB tax team can advise you further on request.