Założenia nowej koncepcji REIT Podatek minimalny zostanie zmieniony Planowane zmiany w zakresie interpretacji indywidualnych -…
Date of an article 26 April 2018 r.
Newsletter Real Estate April 2018 r.
Ministry of Finance have made an announcement about works on the draft of act implementing REIT (Real Estate Investment Trust) to Polish legal system. Conception covers establishing of institution investing in lease of properties (so called F.I.N.N.) in a form of joint-stock company.
The company would have the right to several tax preferences, such as:
According to official announcement of Ministry of Finance the project will be adopted by Council of Ministers in the first half of 2018.
According to announcement published on website of Ministry of Finance, regulations concerning minimum tax on commercial property shall be changed. It’s the effect of consultations with European Commission.
Planned changes covers:
As it is emphasized in communication proposed solutions aims at tightening provisions and eliminating aggressive tax optimization.
Project of an act amending Tax Ordinance was published on website of Governmental Legislation Centre.
According to the project Ministry of Finance plans to implement an obligation of applying for interpretation of tax provisions based on joint application in case when background covers activities performed with related entities.
Moreover, applicants would have indicate details as the value of enterprise, economic right covered by the application which market or nominal value on the date of submission of joint application amounts at least PLN 10 million.
Significant aspect of amendment is conception of cessation of validity of individual tax rulings issued before the amendment have come into force. It would concern rulings issued to situations which based on new provisions would fall under obligation of submission of joint application.
In individual tax ruling of 27 March 2018, no 0114-KDIP1-1.4012.127.2018.1.AO tax authority has dealt with the issue of VAT taxation of undeveloped property supply.
The case concerned company, running business activity exempted from VAT. In 2008 the company acquired land together with service building placed on it. In 2009 the building was almost entirely demolished (only strip foundation remained). The company applied to tax authority with the question whether the sale will be exempted from VAT.
The company presented the view that property is eligible for exemption i.e. it shall not be treated as a land but still as developed land with structure. The company referred to the judgement of Court of Justice of the European Community of 12 July 2012 no C 326/11 according to which “until the last rock has not been removed, supply of property consisting of land and almost demolished building shall be treated as a supply of existing building exempted from VAT.”
Tax authority considered company’s standpoint as incorrect. Due to the fact that building was removed from the buildings register and in predominant part demolished, in such a case transaction shall be classified as the sale of undeveloped plot of land. Therefore, there would be no sale of elements of building in a form of strip foundation.
Such transaction will be taxed according to standard 23% VAT rate.
In judgement issued on 28 September 2017 (no II FSK 2630/16) Supreme Administrative Court have verified the case concerning taxation of sale of real property.
Background concerned the company being VAT taxpayer which acquired the right of perpetual usufruct of two plots of land – A and B, covered by one mortgage register. The plot A is a undeveloped area while plot B is developed with buildings and structures constituting separate from the land object of ownership.
Supply of the plot B together with objects located thereon was exempted from VAT (taxed with TCLT). On the other hand transaction of sale of plot A was in part taxed with VAT and in part tax exempted.
The company applied to tax authorities with the question whether agreement on the sale of real property shall be taxed with TCLT in case in part transaction is subject to VAT and the other part is VAT exempted. The company claimed that as within one agreement one party is treated as VAT taxpayer such agreement should be excluded from the scope of TCLT.
Ministry of Finance indicated that part of plot A which was taxed with VAT shall be exempted from TCLT.
The remaining part of plot shall be then covered by TCLT.
The standpoint of tax authority was confirmed by administrative court. As it was indicated, there can be no situation when at least part of the price of sold property is not subject to VAT, nor TCLT.
According to the judgement of Constitutional Tribunal concluded on 18 April, no K52/16 – application by analogy actio Pauliana to protect public liabilities is consistent with Constitution.
Actio Pauliana is civil law institution enabling to revoke agreement in court, mostly the sale agreement, when situation of creditor got worse as a result of transaction.
In practice it means that transactions or donations which impede collection of tax may be questioned by clerks in court.
Background concerned municipality being active VAT taxpayer. The municipality concluded agreements for placing advertisement on properties or land.
Taking the above, municipality had doubts regarding correctness of VAT qualification of agreements related to advertisements, in particular to the tax point for VAT. They claimed that conclusion of agreement related to authorization for placing of advertisement shall be classified as lease service for which tax obligation will arise on the date when invoice is issued. Municipality underlined that all fees related to creation of advertisement are incurred by the tenant.
Tax authorities considered taxpayer’s standpoint as incorrect. Tax authority took the standpoint that advertising services do not fulfill conditions characteristic for lease agreement (giving item to tenant for its use or its use and derive of benefits from it). Therefore, services shall be treated as advertisement services for which tax obligation arises when services are rendered.
Above ruling was issued on 5 April 2018, no. 0112-KDIL2-1.4012.57.2018.1.MK.