POLAND Law and Practice Contributed by: Michał Wielhorski, Mateusz Prokopiuk, Małgorzata Wąsowska and Klaudia Michalec, act legal Poland
The provisions of the relevant double tax treaty may affect the scope and method of taxation of non-residents’ income in Poland. Both the rental and sale of real estate may be subject to VAT. Given that rental income is not subject to WHT, the property owner is responsi - ble for settling income tax. 8.5 Tax Benefits In Poland, owning real estate used for business purposes offers tax benefits, particularly through depreciation deductions. Real estate compa - nies can deduct tax depreciation of buildings, but only up to the amount of accounting depre - ciation that impacts the financial result. In prac - tice, tax depreciation cannot exceed accounting depreciation. This limitation has raised concerns
when a company does not apply accounting depreciation according to its accounting poli - cies. However, administrative courts currently tend to support taxpayers’ interpretations. Depreciation rates can be individually deter - mined or increased based on the type of the asset, its technical condition, or its usage inten - sity. Residential properties, even when used for business, are no longer eligible for depreciation as of 2023. Non-residential buildings, however, can still be depreciated using statutory, individu - al or increased rates. Additionally, property-relat - ed expenses – such as real estate tax, financing costs, and repairs – are generally recognised as tax-deductible. This allows businesses to reduce their taxable income and benefit from lower tax obligations.
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