Tax on revenues from buildings in PIT in practice - part 2

Service-Tax

The new tax on revenues from buildings applies to fixed assets classified on the basis of the KŚT as buildings entered in the fixed assets register. It turns out that it will cover not only the owners of such buildings, but also the co-owners. In addition, it will cover buildings that have only been partially rented, leased or leased. It is therefore worth getting to know in practice how to calculate the tax liability resulting from the new levy in these and other economic circumstances.

How to determine your taxable income

Pursuant to Art. 30 g of paragraph 1. 1 point 4 of the PIT Act, the tax on revenues from buildings amounts to 0.035% of the tax base for each month.

When determining the amount of tax, the taxpayer will take into account the income that will be the initial value of buildings that are fixed assets. Thus, the income for:

  1. buildings constituting fixed assets, i.e. for those that are included in the fixed assets register, their initial value will be as of the first day of each month,

  2. buildings that are tangible assets just purchased and accepted into the register of fixed assets will be the initial value determined on the date of entering the fixed asset into the register (in the month in which the fixed asset was entered into the register).

It should be noted that for buildings that are fixed assets, which are already included in the register of fixed assets, the income will be the sum of the initial values ​​of these buildings, but on the first day of each subsequent month for which the advance tax on income from buildings will be calculated.

This means that if the taxpayer, for example, owns several buildings for rent, lease or leasing, the value of which in one month will slightly exceed PLN 10,000,000 and in the second, as a result of permanent loss of value of one of the buildings, this sum will drop below this amount, then settling the tax for the next month will be exempt from paying the tax on revenues from buildings.

The situation may also be the opposite, when the taxpayer, for example, by determining the initial value of rented, leased or leased buildings, receives the amount of PLN 9,870,000, but at the same time upgrades one of them by PLN 470,000 in a given month.

However, the taxpayer should remember that for the purposes of calculating the tax on revenues from buildings, the value of the improvement or permanent diminution in value of fixed assets will increase or decrease the initial value of fixed assets, respectively, but from the first day of the following month.

Buildings owned or jointly owned by the taxpayer

If the buildings that include the tax on revenues from buildings are jointly owned by the taxpayer, when calculating the sum of income subject to taxation with this tax, he will take into account in the case of buildings that are:

  1. joint ownership of the taxpayer - the sum of the initial values ​​of these buildings resulting from the record of the taxpayer's fixed assets,

  2. owned or jointly owned by a company that is not a legal person - the sum of the initial values ​​of these buildings per shareholder.

Tax on revenues from buildings and buildings up to PLN 10 million

The sum of revenues (determined as presented above) obtained from individual buildings (fixed assets for rent, leasing, owned or co-owned by the taxpayer) will be free from tax on revenues from buildings, if the amount of this total revenue is less than or equal to PLN 10,000,000 .

It should be noted, however, that the legislator indicates that the taxpayer should determine the sum of revenues from buildings, i.e. the sum of the initial values ​​covered by the tax on revenues from buildings, and not individual buildings (individually).

Example 1.

A taxpayer conducting business activity consisting in the production of plastics for car tires has (as of March 1, 2019) the following assets in the fixed assets register:

  1. a small warehouse with an initial value of PLN 2,750,000,

  2. an office building with an initial value of PLN 2,450,000,

  3. management building with an initial value of PLN 1,210,000,

  4. a production hall with an initial value of PLN 690,000,

  5. goods and forwarding warehouse with an initial value of PLN 7,200,000,

  6. garage building with an initial value of PLN 2,350,000.

Of the above-mentioned, the taxpayer leased the fixed assets listed in items 1, 2 and 5 and 6 in full.

At first, it seems that the taxpayer will not be subject to the tax on income from buildings. However, the legislator requires that the method of calculating revenues for the purposes of tax on revenues from buildings should take the form of adding up the initial values ​​of all buildings subject to this tax.

Therefore, the revenue for the purposes of taxation with the tax on revenues from buildings is determined as the sum of the initial values ​​(on the first day of each subsequent month for buildings already existing in KŚT, and for new ones according to the value determined in the month of acceptance) of buildings leased, leased or otherwise form, that is:

Income subject to tax on building revenues → PLN 2,750,000 + PLN 2,450,000 + PLN 7,200,000 + PLN 2,350,000.

Thus, the tax base for the tax on income from buildings will be:

PLN 14,750,000 - PLN 10,000,000 = PLN 4,750,000

Therefore, the advance payment for the tax on revenues from buildings for 03/2019. will be → 4.750.000 x 0.035% = PLN 1.663.

Tax on revenues from buildings and the sale or lease of a building

A taxpayer who owns buildings subject to the tax on revenues from buildings in business activities, which he has given for use to another taxpayer under an operating lease agreement, is obliged to settle the tax on revenues from buildings for the first time in the month of putting the leased object into use.

The same principle applies to buildings subject to the tax on the income from buildings which the taxpayer rented and sold. This means that the taxpayer who sold the rented building will still be required to settle the tax on revenues from buildings in the month of sale.

Example 2.

A taxpayer conducting business activity consisting in renting four buildings with commercial premises (as of 01/04/2019) has the following assets in the fixed assets register:

  1. building no. 1 (12 commercial premises) with an initial value of PLN 7,500,000,

  2. building no. 2 (5 commercial premises) with an initial value of PLN 2,500,000,

  3. building no. 3 (9 commercial premises) with an initial value of PLN 6,000,000.

In the month of 04/2019. has sold building No. 1.

Still in the month of 04/2019. the taxpayer will settle the tax on revenues, where the taxable income will be PLN 6,000,000.

Therefore, the tax on revenues from buildings will amount to → PLN 6,000,000 x 0.035% = PLN 2,100

Example 3.

A taxpayer running a business consisting in renting construction machinery, also rents halls of various types. As of April 1, 2019. the taxpayer has the following assets in the register of fixed assets:

  1. garage hall No. 1 with an initial value of PLN 1,500,000,

  2. garage hall No. 2 with an initial value of PLN 1,000,000,

  3. a warehouse with an initial value of PLN 4,500,000,

  4. cooling hall with an initial value of PLN 4,000,000.

Items 1,2,3 are for lease. In the month of 04/2019. the taxpayer additionally leased a cold store. As a result, the rental and leasing from 04/2019 the buildings with the initial value were commissioned on 01/04/2019. in total PLN 11,000,000.

Therefore, it is a taxpayer, as a user who enters into operating lease starting from 04/2019. is obliged to settle the tax on revenues from buildings, where the tax base will be PLN 1,000,000.

The tax on revenues from buildings will therefore amount to → PLN 1,000,000 x 0.035% = PLN 350

Renting a part of a building and tax on revenues from buildings

A taxpayer who owns buildings (fixed assets) in his business may want to rent, lease or lease only a part of such a building. In such a case, the revenue for taxation with the tax on revenue from buildings is determined proportionally, as:

  • share of usable space put into use
  • in the total usable area of ​​this building.

This proportion is determined on the first day of each month.

However, if the total share of the usable floor area of ​​a building commissioned for use does not exceed 5% of the total usable floor area of ​​the building, then the taxpayer is not required to determine the income to be paid with the tax on income from buildings.

Example 4.

A taxpayer running a business consisting in the assembly of electrical installations has (as of 01/04/2019) the following assets in the fixed assets register:

  1. a small warehouse and shipping hall with an initial value of PLN 3,750,000,

  2. an office building with an initial value of PLN 6,000,000,

  3. management building with an initial value of PLN 1,210,000,

  4. a production hall with an initial value of PLN 690,000,

  5. a warehouse with an initial value of PLN 7,200,000,

Of the above-mentioned, the taxpayer partially rented out the fixed assets listed in points 2 and 5. The sum of the initial values ​​as at 04/01/2019. amounts to PLN 13,200,000. However, in the case of an office building with an area of ​​1,200 m2, the taxpayer decided to rent only part of it, i.e. 360 m2. However, this part is more than 5%, therefore the taxpayer will be obliged to determine the income and charge tax on income from buildings.

First, the taxpayer determined the proportion for the usable part of the office building, which was rented → 360 m2 / 1,200 m2 x 100% = 30%

Thus, the taxable income amounted to → PLN 7,200,000 + (PLN 6,000,000 x 30%)

Tax base → PLN 9,000,000

Tax on revenues from buildings for 04/2019. (minus the free amount of PLN 10,000,000) was, therefore, → 0 PLN