In 2025, the real estate sector in Poland will face many issues, including tax challenges. Firstly, on 1 January 2025, new real estate tax regulations entered into force, which have a direct impact on the real estate sector. The new regulations have introduced changes, particularly with regard to the objects of real estate tax – buildings and structures. Unfortunately, the new rules are not clear, and the first weeks of the new rules confirm this.
Secondly, 2025 is the first year in which many taxpayers, especially those belonging to large groups, will have to deal with the issue of the global minimum tax (so-called Pillar II) for the first time. In addition to the new rules, the real estate sector should follow the development of the interpretation of the tax law. The first deadline for declaring and paying the minimum tax under the new rules (for 2024) is 2025.
Of particular note are the rules on depreciation of non-depreciable real estate valued at fair value. In the first rulings on this issue by the Supreme Administrative Court of 28 January 2025 (file ref. II FSK 788/23, II FSK 789/23, II FSK 987/23, II FSK 1086/23, II FSK 1652/23), the Supreme Administrative Court overturned the verdicts of the State Administrative Court in favor of the real estate companies and dismissed the real estate companies’ appeals in cassation against the verdicts of the State Administrative Court against them. At the same time, it presented its own position on the case, according to which it is necessary to determine the value of the depreciated property on the basis of fair value or IFRS and to relate this value to the hypothetical value that would have been determined if the paccounting law had been applied to the depreciation base. If it turns out that the depreciation calculated on the basis of the principles previously applied by the company would be higher than the depreciation calculated on the basis of the Accounting Act, the value of the depreciation for tax purposes should be reduced to the value of the depreciation calculated on the basis of the Accounting Act. However, the Supreme Administrative Court’s position leaves some doubt as to whether real estate companies that do not depreciate for accounting purposes may depreciate real estate under the CIT Act – the Supreme Administrative Court did not explicitly refer to such a situation in the oral grounds of the ruling.
Interpretations of the rules on real estate companies may also be important for the sector. The Director of the National Revenue Information Service has started to present a new position on the rules for determining the book value of subsidiaries. According to this position, it is not the book value of the shares in subsidiaries that should be taken into account, but the book value of the properties held by these subsidiaries in proportion to the size of the shareholding in these companies. This new approach was also confirmed by the State Administrative Court in Warsaw in its ruling of 16 October 2024, file no. III SA/Wa 1771/24. The adoption of this interpretation means an extension of the scope of entities subject to reporting under the regulations on real estate companies. More importantly, it may result in new entities being charged with the obligations of an income taxpayer in the event of a sale of such real estate companies.
In addition, a number of companies operating in the property sector will have to deal with existing tax issues, such as the so-called tax on buildings or the so-called tax on shifted profits. Standard income tax and other taxes should also not be forgotten.
The above relates to the current activities of companies operating in the property sector. At the same time, we are seeing a slow recovery in the real estate transaction market, especially in certain segments of this market, such as data centers and warehouses. There has been no change in the tax rules governing the taxation of transactions. However, the complexity of the tax rules is such that measures to protect the tax interests of the parties to the transaction will certainly not become less important, but rather more important. This applies both to protection against the tax risks associated with the assets acquired, where a well-conducted due diligence is crucial, and then to appropriate protection through the correct drafting of the relevant contractual clauses, as well as to those relating to the transaction itself and its taxation (where it is important to hedge the risks, e.g. in the form of an individual tax ruling or a hedging opinion). Of course, this does not exhaust the possible tax issues involved in transactions in the real estate market, as well as operations in this segment in general.
