Polish Deal: real properties – changes in CIT

by Maciej Woźnica

20 August 2021
 

The bill amending the CIT Act, which is one of the key elements of the Polish Deal, includes a number of modifications which greatly affect real estate sector. The key changes include:

• the tax depreciation of residential property will be non-tax-deductible;
• tax depreciation rates will be capped (tax depreciation rates will have to be lower than depreciation rates for accounting purposes);
• refined “thin capitalisation” rules – the higher of: a maximum of 3 million zloty or 30% of tax EBITDA will be tax-deductible costs;
• intra-group loans granted for financing of capital transactions will be non-tax-deductible.

Furthermore, the bill includes a lot of changes affecting tax implications of all kinds of restructuring measures often taken by real estate market players.