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A draft of Law Act on Companies of Rental Properties Market was published in Poland on October 14, 2016. The proposed regulations introduce an exemption from  corporate profits tax for companies operating in the rental properties sector.

Joint stock companies seated in Polandmay benefit from this exemption if they meet a number of criteria, i.a.:

·         the share capital amouts to at least PLN 60,000,000;


·         not less than 70% of the asset valueinclude real estate, shares of subsidiaries operating in the sector of rental properties;


·         not less than 70% of net salesis generated by renting real estate or parts thereof, or from the sale of real estate or parts thereof;


·         the value of the liabilitiesdo not exceed 70% of the asset value;


·         not less than 90% of the profitsderived from the rental of real estate, the sale of real estate or parts thereof, or dividends paid by subsidiaries is paid to the shareholders;


·         alternatively profit may be allocated for the acquisition of other properties, shares representing not less than 95% of the share capital of the company in which at least 70% of the asset value include real estate properties;


·         revenues from renting of real estate properties or their parts are derived from the rental of at least three real estate properties or parts thereof.


The CIT exemption may be applicable also to  subsidiaries if certain conditions are met.

There are some doubts relatingto among others  the definition of real etate property, which covers only buildings permanently connected with land or parts of such buildings, constituting - under the specific provisions – separate object of ownership, with exception of residential buildings and dwellings.



Companies willing to benefit from the exemption will have to notify the tax authoriotes about their decision to benefit from the exemption.



In practice, the entry into force of the proposed Law Act would eliminate double taxation of income generated by renting real estate properties.

A similar solution has been already adopted in many legislations of EU Member States as so-called REITs (Real Estate Investment Trusts).

In order to benefit from the proposed exemption the companies may have to implement certain actions to meet the statutory conditions, eg. increasing the share capital. Such steps will usually require professional support provided by legal, tax and accounting experts.

The planned date of entry into force of the Law Act is 1 January 2017.


If you are interested in obtaining further information, or would like to discuss the impact of the above changes please contact:

Juastyna Bauta-Szostak tel. + 48 22 322 68 88

or your tax advisor from MDDP.

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