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On 1 January 2025 a revised Local Taxes and Fees Act (Ustawy o podatkach i opłatach lokalnych, u.p.o.l.) entered into force. The amendment introduces new definitions for “building”, “structure”, “construction object” and “construction works”. One of its primary objectives is to detach the definition of a building for property‑tax purposes from the provisions of the Building Act of 7 July 1994, thereby creating an independent regulatory framework for taxation. The changes are particularly relevant for technical equipment such as transformers and electrical switchgear. Prior to 2025, the classification of these devices for tax purposes largely depended on whether they could be regarded as part of a building, as building equipment, or as part of the electrical network under the Building Act. Over the years, the Supreme Administrative Court (Naczelny Sąd Administracyjny) consistently held that a transformer, in principle, is not a building. Consequently, both tax authorities and administrative courts maintained that transformers and the switchgear connected to them were not subject to property tax. They were treated as technical elements whose taxable value could include only associated building components, such as support structures or containers in which the equipment was housed. As a result, operators generally did not include the value of transformers and switchgear in the taxable base for property tax. The new law’s redefinition of building-related terms is expected to clarify the tax status of such equipment and may lead to changes in how these assets are assessed for local taxes. Article source: Rzeczpospolita | Image credit: Rzeczpospolita
On 1 January 2025 a revised Local Taxes and Fees Act (Ustawy o podatkach i opłatach lokalnych, u.p.o.l.) entered into force. The amendment introduces new definitions for “building”, “structure”, “construction object” and “construction works”. One of its primary objectives is to detach the definition of a building for property‑tax purposes from the provisions of the Building Act of 7 July 1994, thereby creating an independent regulatory framework for taxation. The changes are particularly relevant for technical equipment such as transformers and electrical switchgear. Prior to 2025, the classification of these devices for tax purposes largely depended on whether they could be regarded as part of a building, as building equipment, or as part of the electrical network under the Building Act. Over the years, the Supreme Administrative Court (Naczelny Sąd Administracyjny) consistently held that a transformer, in principle, is not a building. Consequently, both tax authorities and administrative courts maintained that transformers and the switchgear connected to them were not subject to property tax. They were treated as technical elements whose taxable value could include only associated building components, such as support structures or containers in which the equipment was housed. As a result, operators generally did not include the value of transformers and switchgear in the taxable base for property tax. The new law’s redefinition of building-related terms is expected to clarify the tax status of such equipment and may lead to changes in how these assets are assessed for local taxes.
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