NSA: Local Taxes and Fees Act gives rise to numerous doubts
Reduction, reduction and metering stations have a technical-utility relationship with a gas pipeline, which determines the manner in which these facilities are subject to real estate tax. They should be taxed as constructions - according to the judgment of the NSA of 10 October 2022 (ref. III FPS 2/22).
However, it must be emphasised that the judgment of the Supreme Administrative Court concerns the legal state in force until 28 June 2015. Therefore, it does not apply to the current legal status.
– It should be recalled that prior to 28 June 2015, according to the statutory definition, a building object was a structure constituting a technical and functional whole together with installations and equipment. Subsequently, the regulations were amended and a construction object was defined as a structure together with installations ensuring the possibility to use the object in accordance with its purpose, erected with the use of construction products. However, a caveat must be made here that the definition of a structure was not amended in the Local Taxes and Fees Act. It is a construction object within the meaning of the construction law, which is not a building or a small architecture object, as well as construction equipment within the meaning of the construction law related to a construction object, which ensures the possibility of using the object for its intended purpose – explains Piotr Kalemba, senior manager, tax advisor at Thedy & Partners.
At the same time, he adds: ‘Despite the fact that the NSA’s ruling relates to the legal state before 28 June 2015, companies that have transmission infrastructure are advised to be cautious in the qualification of facilities in terms of their real estate taxation.’
Interestingly and significantly, the NSA, in its verbal justification of the judgment, drew attention to one important fact, namely that the Act on Local Taxes and Fees has not been amended for years – it is laconic and difficult to interpret, inter alia through numerous references to non-tax provisions. This creates uncertainty for both taxpayers and tax authorities.
– For years, as experts with extensive experience in the field of property tax, we have been emphasising that the Act on Local Taxes and Fees needs a thorough overhaul. Amendments are only a cover-up for existing problems. What is needed here is a new and modern law, which would be an opportunity to eliminate numerous doubts – assesses Piotr Kalemba.