Services regarding the construction, repair, and maintenance of wind power plants may be subject to flat-rate income tax, with different flat rates applicable. Services directly related to construction part are taxed at a flat rate of 5.5%, while other services are taxed at a flat rate of 8.5%.
Services related to the construction of wind power plants
Services associated with the construction, repair or maintenance of wind power plants may vary significantly and typically include preparation of various wind turbine components (tower, nacelle, blades and hub).
The above services are classified under the Polish Classification of Products and Services (PKWiU):
- 42.99 – construction work for other civil engineering structures not elsewhere classified and
- 43.99 – Works related to the performance of other specialized construction works not classified elsewhere;
- 42.22.23.0 – in the scope of erection and assembly of wind turbine structures – towers (parts, pipes, sections), nacelles, blades, i.e. general construction works related to the construction of power plants;
- 33.20.50.0 – assembly of wind turbine subassemblies/components into a complete unit at the installation site, connection of all mechanical, electrical and electronic components, including unloading from trucks and cleaning, performed as part of a single contract, i.e. electrical installation services.
Lump sum and rates
Lump sum taxation is regulated by the Act of November 20, 1998, on lump sum income tax on certain income earned by natural persons (consolidated text: Journal of Laws of 2020, item 1905, as amended; the Lump Sum Act). It includes grouped economic activities and sets specific lump sum rates for them.
The flat-rate tax rate on recorded income obtained in connection with business activity depends on the actual type of services provided as part of that activity. For most services, the tax legislator uses PKWiU symbols to determine the flat-rate tax rate for services (the classification is made by the taxpayer). However, the issue of the 5.5% lump sum tax is regulated differently. This rate applies to income from, among others, manufacturing, construction, and transportation.
The Lump Sum Tax Act does not define the terms „construction services” or „construction works.” It seems reasonable to refer to the Act of July 7, 1994, Construction Law (consolidated text: Journal of Laws of 2024, item 725, as amended). It contains, among others, the following definitions:
- building structure – a building, structure or small architectural structure, together with installations ensuring that the structure can be used for its intended purpose, erected using construction products;
- building – a structure that is permanently connected to the ground, separated from the surrounding space by building partitions, and has foundations and a roof;
- structure – any construction object that is not a building or a small architectural structure, such as: linear structures, airports, bridges, viaducts, flyovers, tunnels, culverts, technical networks, free-standing antenna masts, free-standing advertising boards and advertising devices permanently attached to the ground, earthworks, defensive (fortifications), protective structures, hydrotechnical structures, reservoirs, free-standing installations al or industrial equipment, sewage treatment plants, waste disposal sites, water treatment plants, retaining structures, above-ground and underground pedestrian crossings, site infrastructure networks, sports facilities, cemeteries, monuments, as well as parts of technical equipment (boilers, industrial furnaces, nuclear power plants, wind power plants, offshore wind turbines and other equipment) and foundations for machinery and equipment, as technically separate parts of items constituting a functional whole;
- construction works – construction, as well as works involving the reconstruction, assembly, renovation or demolition of a building.
Construction works should be understood as essentially all works and activities related to the erection of buildings or structures.
In turn, according to PKWiU, buildings and construction works are classified in section F. This section includes the following divisions:
- Division 41 – buildings and construction works related to the construction of buildings,
- Division 42 – structures and general construction works related to civil engineering,
- Division 43 – specialized construction works.
Section F – construction of buildings and construction work includes:
- buildings and other civil engineering structures,
- general construction and specialized construction work in the field of civil engineering, such as: work related to the construction of new buildings, reconstruction or renovation of existing buildings, including the assembly of prefabricated structures and permanent or temporary structures.
Lump sum and services related to wind power plants
The Lump Sum Act provides for a rate of 5.5% only for income from manufacturing, construction work or transport of cargo by motor vehicles with a load capacity of over 2 tons. It therefore applies to income from construction work on parts of wind power plants (i.e. relating exclusively to structures within the meaning of the Construction Law).
The above is based, inter alia, on the individual interpretation of December 6, 2024, No. 0115-KDST2-1.4011.506.2024.2.MR.
Summary
The development of wind energy requires the involvement of specialists. Remuneration for their services is subject to taxation, including flat-rate income tax. The applicable tax rate depends on the scope of services, in particular whether they relate to construction works and parts of wind power plants. It is worth noting that the assessment of construction works and construction parts of the aforementioned power plants for lump-sum purposes is carried out by tax authorities through the prism of construction law, and not tax law, e.g. the Act on Local Taxes and Fees.
