Supreme Administrative Court, II FSK 71/21

Ruling: The minimum income tax on real estate is applied only on income from lease or rental contracts and other similar ones, whereas a hotel agreement is significantly distinct from them.

Explanation: The minimum income tax on real estate was introduced in 2018: its rate is 0,035% of the gross income from a real estate minus 10 million PLN. The building must be owned or co-owned by the taxpayer, be located in Poland and be rented or leased or be a subject of a similar contract.

The Supreme Administrative Court dealt with an appeal from a Voivodeship Administrative Court ruling on the minimum income tax. The Voivodeship Court had upheld the interpretation of the tax authorities, that hotels are also subject to this tax, as hotel contracts in general resemble a rental contracts and other similar ones, so that they meet the criteria outlined in the Act on CIT.

The Supreme Court however repealed this ruling and the tax interpretation. The Court explained, that a hotel contract is governed by a separate law and is a nominate contract, therefore the lawmaker should’ve explicitly mentioned this type of contract in order to make it subject to tax.

Impact: Although the written reasons for judgement are still to be published. After the publication it will be clear, whether the verdict will have greater ramifications and affect also the taxation of e.g. the Private Rented Sector.