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Limitation of tax depreciation in real estate companies

Limitation of tax depreciation in real estate companies

02.12.2021

| Anna Witosławska

Some of the tax changes within the scope of the Polish Order governmental programme may exert an adverse impact on real estate trade.

The changes present a limitation in the recognition of tax depreciation of real estate assets in real estate companies as a tax cost.
 
According to the wording of the altered provision of Article 15 section 6 of the CIT Act and Article 22 section 8 of the PIT Act, the possibility of treating depreciation write-offs as tax costs in real estate companies will be limited to the value of depreciation write-offs made in accordance with accounting regulations and which lower the financial result in a given year. This change means that tax depreciation of real estate will not be possible if a real estate company values its real estate according to market prices.

Depreciation write-offs will be possible to be deducted only by these real estate companies which value its investment buildings as fixed assets.



Anna Witosławska

Specialists:

Anna Witosławska

Statutory Auditor

Anna Witosławska

Contact:

Rondo ONZ 1
00-124 Warsaw