Rz: Functional relationship does not prejudge tax liability

Michał Nielepkowicz, tax adviser, partner in Thedy & Partners was asked to comment on this verdict.
– This is an important NSA ruling for the non-taxation of various other types of objects, mainly technical devices. In the state of the law to which the case referred, there was in the regulations a concept of the so-called technical-utility whole often used by tax authorities to tax not only building parts or foundations of technical devices, but also the devices themselves. NSA approached it in such a way that particular elements or objects must constitute one material object, one thing within the meaning of the Civil Code. This is important insofar as, on this basis, a concrete batching plant constituting a group of interconnected devices cannot be taxed as one big construction but each of the elements conventionally constituting such a plant must be viewed separately. The NSA’s concept should be applied by the tax authorities also to each of the elements constituting the junction, i.e. to each piece of equipment – if it is determined that the equipment has its own foundations or building parts, the tax authorities may tax only those foundations/building parts as structures, but not the equipment itself, connected with it in a separable manner, just as with other equipment constituting the whole in the form of a junction. The node is not a single material object but a set of connected devices that can be disconnected without any obstacles. This is very often the case in practice, as such devices are moved from one place to another – says Michał Nielepkowicz in the newspaper.
The entire article can be read in Rzeczpospolita of 8 February 2022, page A12