CIT exemption for foreign investment funds investing in Polish real estate – key court rulings and practical implications

Recent judgments of Polish administrative courts mark an important shift in the interpretation of the Corporate Income Tax (CIT) exemption applicable to foreign investment funds investing in Poland. For international investors active in the real estate sector, these rulings significantly enhance tax certainty and reinforce the attractiveness of Poland as an investment destination.

CIT exemption for foreign investment funds under Polish tax law – current dispute background

Under the Polish CIT Act, certain foreign investment funds may benefit from a CIT exemption, provided that their activities fall within a statutorily defined scope. In recent years, Polish tax authorities have challenged the application of this exemption where a fund’s investment strategy involved real estate, arguing that these types of property investments exceed the permitted range of activities.

This restrictive approach has led to a series of disputes initiated by foreign funds seeking confirmation of their entitlement to the exemption through individual tax rulings.

Polish administrative courts confirm CIT exemption for real estate investments by foreign funds

In two landmark judgments issued in October 2025, the administrative courts clearly rejected the position taken by the tax authorities.

In its judgment of 28 October 2025 (I SA/Po 237/25), the Regional Administrative Court in Poznań held that investing in real estate does not, in itself, exclude the application of the CIT exemption. The Court emphasised that ownership of real estate constitutes a “property right”, which is expressly referenced in the statutory provisions defining the permitted activities of exempt funds.

Shortly afterwards, in its judgment of 22 October 2025 (I SA/Gl 420/25), the Regional Administrative Court in Gliwice confirmed this interpretation. The Court made it clear that the exemption may apply both where a foreign fund invests directly in real estate and where the investment is structured indirectly through companies holding real estate assets.

Taken together, these rulings establish a coherent and investor-friendly line of case law: the mere fact that a foreign investment fund allocates capital to Polish real estate does not justify denying the CIT exemption, provided that the remaining statutory conditions are satisfied.

Impact of recent case law on foreign real estate funds investing in Poland

From a business and tax perspective, the significance of these judgments goes beyond the individual cases. They provide a clear signal that:

• foreign investment funds may treat investments in Polish real estate as compatible with the statutory CIT exemption, provided that the remaining conditions are met,
• both indirect models involving real estate companies and structures based on direct ownership of real estate may be structured within the scope of the exemption,
• Poland continues to develop a stable and competitive tax environment for cross-border real estate investments, supported by a consistent and commercially realistic judicial approach.

For foreign funds active in the Polish real estate market, this is an appropriate moment to reassess existing investment structures, review historical CIT settlements and evaluate whether the conditions for applying the exemption – or recovering overpaid tax – are met.

Tax refund opportunities and reopening of CIT proceedings for foreign funds

The impact is not limited to future investments. Funds that previously paid Polish CIT due to denied exemptions may consider remedial actions. Each case requires a careful assessment of procedural deadlines and eligibility conditions under Polish tax law.

Key takeaway for foreign real estate funds

The analyzed judgments confirm that Polish administrative courts adopt a substance-driven and economically rational interpretation of the CIT exemption for foreign investment funds. For international investors targeting the Polish real estate market, these rulings materially reduce tax exposure and support the use of fund-based structures as a viable and efficient investment platform.