BI: Companies will pay record property taxes. Some say pas
More for electricity, gas, fuel and on top of that higher property tax. Some businesses, especially small service providers and shopkeepers, are saying enough. Because costs are rising and revenues are falling. For many, the budget is no longer in balance. Tax increases of up to 12 per cent are pouring over the bitter end. Businesses are threatening to close down, writes Business Insider.
Michal Nielepkowicz, tax advisor and partner at Thedy & Partners, commenting on the issue on the portal, points out that in fact very high inflation translates into a record increase in property tax rates on land and buildings. This increase will be around 12% year-on-year, which means a drastically higher cost on the part of businesses for property tax in 2023. Taxpayers are looking forward to the arrival of the New Year with trepidation.
There is little consolation for businesses in the fact that property tax is a deductible expense. This is because we need to remember that expenses in costs reduce income in taxable income, but this expense has to be incurred in the first place anyway, which, with all business costs rising significantly, means that taxpayers may find it extremely difficult to pay property tax as well. In addition, deductible costs reduce revenue, resulting in lower taxable income, but this revenue also has to be earned, which, with the spectre of the expected recession, may not happen at all.
In this respect, the drastically higher cost of property tax is another important business expense that may determine whether a company survives.
As a result, we should expect to see a far greater number of applications for tax relief such as requests for instalment payments or tax deferrals next year. Let’s just hope that local authorities are prepared to understand the difficult situation of taxpayers and are more willing than before to provide such support in paying taxes.
This situation should also prompt the MF and local governments to think deeply about the design of rates and taxation rules in property tax, where the archaic approach does not reflect the current situation of taxpayers, including entrepreneurs, especially during the expected recession.
Entire article: Rekordowe podwyżki podatku od nieruchomości Firmy upadną? (businessinsider.com.pl)