Tax Highlights for Real Estate – November 2023
December 2023
- Income obtained by the family foundation arising from participation in a civil partnership agreement shall be subject to a 25% income tax
In the tax ruling dated 20 October 2023, ref. N. 0111-KDIB1-2.4010.186.2023.2.EJ, the Director of the National Tax Information indicated that the participation of a family foundation in a civil partnership does not make the civil partnership subject to CIT. However, engaging in economic activities by the Family Foundation through participation in the civil partnership agreement exceeds the scope of activities envisaged in the Family Foundation Act. Thus, the income obtained by the Family Foundation from participation in a civil partnership agreement is subject to a 25% punitive income tax.
- Exemption from real estate tax for municipal-owned elements of road infrastructure
The Provincial Administrative Court in Gorzow Wielkopolski, in the judgment dated 9 February 2023, ref. no. I SA/Go 442/22, stated that roads and road lighting owned by the municipality should not be subject to real estate tax on the same basis as structures owned by entrepreneurs or other entities engaged in economic activities. The maintenance of road infrastructure is an inherent task of the municipality and serves the satisfaction of collective needs, thus excluding a commercial character.
- A mural is a work of art created in a foreign fixed asset exempt from depreciation
In the tax ruling dated 16 November 2023, ref. no. 0111-KDWB.4010.100.2023.1.AZE, the Director of the National Tax Information indicated that a mural constitutes a work of art that, in accordance with Article 16c of the CIT Act, is not subject to tax depreciation. According to the tax authority, the mural meets all the criteria of both a fixed asset and a work of art.
- Payment of remuneration by the company to its partner for the function of an independent commercial representative does not constitute income from hidden profits
In the tax ruling dated 16 November 2023, ref. no. 0111-KDIB1-2.4010.475.2023.2.MC, the Director of the National Tax Information decided that the remuneration paid by the company to a shareholder that serves as an independent commercial representative will not be qualified as income from hidden profits. The granting of commercial power of attorney to the shareholder resulted from his qualifications and experience in managing the company’s enterprise. The proxy played an important role in representing the company and negotiating contracts. If the proxy did not have the appropriate competences, the company would employ a person from the market. Moreover, the remuneration for the proxy was set on market terms.
- It is not possible to issue a VAT invoice for a receipt without a tax identification number
The Provincial Administrative Court in Białystok stated in the judgment of 11 October 2023, ref. no. I SA/Bk 264/23, that the taxpayer has no right to issue an invoice containing customer data for a receipt without a Tax Identification Number. The company argued that sometimes customers, after completing the purchase, do not want to receive a VAT invoice but only a receipt. Only later can they submit such a request. The court pointed out that the entrepreneur is obliged to exercise due diligence and if he intends to use the purchased goods or services as part of his business activity, he should inform the seller about this fact at the time of purchase.
- Expenditures on the purchase of fruit and vegetables in the company may constitute a tax expense
The company plans to purchase fruit and vegetable delivery services from external entities. Providing fresh products to employees and co-workers will increase productivity, improve team relationships and bring benefits in the form of better cooperation and increased revenues. The Director of the National Tax Information in the tax ruling of 26 October 2023, ref. no. 0114-KDIP2-2.4010.465.2023.1.KW indicated that expenses for the purchase of fruit and vegetables meet the conditions for inclusion in tax costs. Such expenses are related to the business activity, are intended to obtain, maintain or secure revenue, are properly documented, and are not subject to exclusion from tax costs.
