Company will pay more on wind power investment

Paweł Wyporski, tax adviser and senior consultant at Thedy & Partners, commented on the ruling at the editor’s request. He recalled that despite the fact that Article 3(3) of the Construction Law explicitly indicated as an example of a structure only the construction parts of technical facilities such as wind power plants – the tax authority, and following it also the Voivodship Administrative Court in Olsztyn, held that a wind power plant may be subject to property tax as a single building object, including everything that constitutes the structural element of the facility. Consequently, in the opinion of the tax authority and the Court, the value of the medium voltage grid – in particular – located inside the tower and the turbine should increase the taxable base of the structure.

In the published justification of the judgment, the Court rightly notes that the register of fixed assets has no formal significance in determining the subject of real estate taxation, however, one may argue with the presented argument that, for taxation purposes, all elements of a broadly understood facility constitute one whole and the value of such a whole determines the taxable base. This position could have its support in the provisions in force until 28 June 2015. – at that time, the assessment whether a given object constituted a structure could be made through the prism of constituting a technical and utilitarian whole, which was confirmed in the resolution of the NSA of 10 October 2022, ref. no. III FPS 2/22.

However, it should be borne in mind that, as of 28 June 2015, the definition of a building object has been changed – the premise of ‘making the installations and equipment a technical and utilitarian whole with the building’ has been replaced by the premise of ‘ensuring by the installations the possibility of using the object in accordance with its purpose’. The legislative phrases used by the legislator are not identical and therefore, bearing in mind the concept of the “rational legislator” – should produce different legal effects, which has been repeatedly confirmed by case law in practice. The administrative courts as well as the tax authorities have noted that from the moment of the aforementioned change in the legislation – technical facilities can no longer be subject to property tax. However, in practice (as confirmed by the ruling under comment), the imprecise provisions referred to in the Act on Local Taxes and Fees often do not allow for correct identification of the subject of taxation, which causes difficulties for taxpayers to correctly settle their tax liabilities.

The entire article can be read in Rzeczpospolita of 8 November 2023, p. H7