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Records and taxation of agricultural land hosting large-scale photovoltaic farms


​by Patrycja Wantoch-Rekowska

18 October 2023 

In July 2023, a group of parliament deputies sent a parliamentary question to the ministers of: finance, agriculture and rural development, as well as economic development and technology about classification of land occupied by large-scale photovoltaic farms. The deputies pointed out a real problem with the classification of the land that hosts a photovoltaic farm – as the land occupied for business other than agriculture, without an in-depth examination of the actual land use. Above all, without checking if the land’s agricultural function has been disabled at all. 

Ba, Br, or perhaps even new land designation

Most photovoltaic farms are erected on land earlier designated as agricultural land in accordance with the official regulation on land and building records – most often this is arable land or permanent meadows (designated as R and Ł, respectively). Once a PV farm is erected, the land classification changes. This sometimes happens even though agricultural activities continue on such land. Authorities which keep the land records usually classify it as industrial land (designation: Ba) indicating that it is land “occupied by transformer stations or collectors”. Such an approach to the classification creates a barrier to a more extensive use of the farms, mainly due to the tax implications. Land that is not designated as agricultural land in the official records cannot be subject to agricultural tax. It is subject to real property tax instead.

The deputies pointed out that the regulation allowed designating an agricultural area as developed agricultural land (designation: Br). However, local authorities claim that the current legal definition in the regulation does not permit such a classification of the PV farms. The deputies proposed to extend or modify the definition of developed agricultural land or introduce a completely new designation for land occupied by PV farms.

Are the current land laws sufficient?

The ministries jointly stated that they were not going to change the definition of developed agricultural land or introduce a new designation for photovoltaic farms. According to case law, land occupied by photovoltaic farms should be classified as industrial land (designation: Ba) or other developed land (designation: Bi) – the exact classification depending on whether there is a building there in the meaning of the construction laws. 

Moreover, land occupied by photovoltaic farms fits the notion of “land used for business purposes”, firmly-established in administrative case law, because the main objective of the activities on such land is to produce and sell electricity. Therefore, any agricultural activities are just ancillary. Consequently, the land should be subject to real property tax. 

Actual land use matters

The case studies described in the parliamentary question involved photovoltaic farms that were built and put into operation. The situation is different if the agricultural land has only been leased for the planned farm and the business operations have not started yet. If the land is still used for agricultural activities despite the lease, it is subject to agricultural tax until the business operations commence. That is because the actual use of the land is what matters here. 

Land leased for a photovoltaic farm – what you need to remember

As mentioned, there are no plans to change legislation in favour of taxpayers.

When it comes to land leased for a photovoltaic farm, make sure you have a good lease agreement that indicates the actual use of the land and its real area, including before the erection of the farm. Well-prepared documents may make a strong case in a dispute with revenue authorities.

If you have a piece of land on which a photovoltaic farm is or will be erected and you are not sure how to tax it, do not hesitate to contact us.


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Jakub Wajs

Attorney at law (Poland), Tax adviser (Poland)

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