The Constitutional Court declared unconstitutional the provisions of the Act on Local Taxes and Charges, to the extent that they allow a civil structure which meets the criteria for being a building to be recognised as a structure | TAX Alert

The Constitutional Court, at its sitting on 13 December 2017 concerning the case No SK 48/15, issued a decision questioning the previous, unfavourable to taxpayers, interpretation applied by tax authorities and administrative courts as to the classification of civil structures (obiekt budowlany) to the category of buildings (budynek) or structures (budowla).

According to the current practice, a number of facilities which met the prerequisites for being recognised as buildings according to the Act on Local Taxes and Charges, such as silos or telecom containers, were classified as structures due to their destination, function, fit-out or actual or possible use. This practice often resulted in the need to pay much higher tax – based on the value rather than on the useful area of such facility.

The Court declared unconstitutional the provisions of Article 2(1) in connection with Article 1a(1) point 1 and 2 of the Act on Local Taxes and Charges to the extent that they permit the application of such circumstances which are not defined in the Act and concern the function or destination in the classification of a given civil structure.
The decision of the Constitutional Court creates an opportunity for reopening of legally and finally closed fiscal and administrative court proceedings in which tax authorities, in their decision, disregarded the fact that a given facility had the features of a building but recognised it as a structure and, consequently, applied a higher tax. A motion for the reopening of fiscal proceedings should be filed within one month, and a motion for the reopening of court proceedings within three months of the effective date of the decision of the Constitutional Court.

In view of the above, we encourage you to verify whether any of your real property was not classified as structure for tax purposes despite having the futures of a building.

We encourage you to contact us should you have any questions as to the influence of the decision of the Constitutional Court on the taxation of your real property.

Patrycja Goździowska – Partner, Tax Advisor
Tomasz Wickel – Partner, Attorney at Law, Tax Advisor
Marcin Muchowski – Senior Associate, Tax Advisor


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