How much more sealing the property market can withstand
There is a real danger that further tax changes and the lack of stability and transparency in the system will not encourage but scare off investors, writes Michał Thedy, tax advisor, partner at Thedy & Partners, in Rzeczpospolita.
A number of changes “sealing” the tax system have been introduced in Poland in recent years. In part, these were a consequence of changes at the supranational level, i.e. at the OECD or EU level, while in part they were our own ‘national’ ideas.
A large part of these ‘national’ changes concerned the real estate market in particular and were quite restrictive, as they introduced, among other things, very significant restrictions on depreciation.
In parallel to the ‘sealing’ of the system, quite a few regulations were also introduced on various tax breaks designed to promote certain activities or allow tax-free reinvestment of profits. Significantly, however, the real estate market has been “excluded” from many of them, e.g. by the lack of exemption for the sale of shares by a Polish holding company.
Moreover, it is not only the restrictiveness of the changes, but also their high frequency. This is manifested, inter alia, in annual CIT amendments, the lack of transition periods, the enactment of significant changes at the end of the year and their introduction at the beginning of the next year or the ambiguity of regulations causing enormous difficulties in their application.
At the same time, it is not only changes in regulations that keep entrepreneurs awake at night. Often, the practice of tax authorities is also changing and the pro-fiscal approach in tax inspections, especially by customs and tax offices, is intensifying.
The entire commentary can be read in Rzeczpospolita of 18 May 2023, page A12