Work on Polish REITs has started
The Ministry of Development and Technology is working on a law on Polish REITs. The adopted name is SINN - companies investing in real estate leasing.
At the beginning of April, we learnt about the assumptions of the act on Polish funds investing in the real estate market (so-called REITs) – they are to be called Companies Investing in Real Estate Rental (so-called SINNs).
SINNs are to positively influence the development of the rental market, increase the share of Polish capital in it and strengthen the Warsaw Stock Exchange,
SINNs are to take the form of joint stock companies and be taxed at a rate of 10 per cent on rental income (with depreciation deductions not counted as costs) and at a rate of 19 per cent on other income.
Importantly, tax liability is to be deferred until dividends are paid (which will be correlated with the obligation to distribute at least 90% of profits each year).
In addition, dividends paid by SINNs to investors are to be exempt from PIT and CIT.
Tax issues are yet to be confirmed with the Ministry of Finance.
– It is worth noting that this is yet another attempt to regulate REITs in Poland. These regulations are needed – REITs are present in 40 countries around the world, including 13 European ones – and let’s hope that good solutions will finally be worked out and the work on this law will be successful, i.e. the expected regulations will come into force, assesses Michał Thedy, partner at Thedy & Partners.