How to account for real estate tax paid
Expenses related to real estate tax and the perpetual usufruct fee should be classified as costs other than directly related to revenue, as the necessity of incurring them results from the very fact of owning real estate - explained the Head of the KIS in the interpretation of 20 February 2023, no. 0114-KDIP2-2.4010.316.2022.2.PK.
As emphasised in the interpretation, in order to correctly assess whether a given expense belongs to a relevant category, it should first be determined whether it can be linked to a specific revenue. Depending on the type of activity conducted, expenses may be qualified differently in different categories – indirect or direct costs.
The obligation to pay real estate tax is linked to the possession of an appropriate legal title, as defined by law, to, inter alia, real estate, and is paid irrespective of whether or not the receivable generates revenue and independent of the manner in which the real estate is used. This means that the taxpayer is obliged to pay the costs of the real estate tax on the basis of separate regulations due to the mere fact of owning the real estate in question. The taxpayer bears these costs irrespective of the purpose for which the property was purchased. Also, fees for perpetual usufruct of land result from the very fact of owning the property and should be classified as an element of fixed costs. Thus, expenses related to the payment of real estate tax and fees for perpetual usufruct of land should be deemed as costs other than directly related to revenue.
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