Agricultural tax and real estate tax - basic information
Each owner of land or buildings, depending on the purpose of its use, is required to pay agricultural tax or property tax annually. The agricultural tax is calculated on the basis of the average rye purchase price established by the President of the Central Statistical Office for the period of 11 quarters preceding the quarter preceding the previous year, in relation to the land area.
Both the real estate tax and the agricultural tax are determined individually by each commune. As a rule, agricultural tax and real estate tax are calculated on an annual basis. Detailed information on the amount of rates and the correct tax calculation is discussed in the article below.
Agricultural tax and real estate tax - what is it about?
Agricultural tax - what is it?
The agricultural tax is regulated by the Act on Agricultural Tax. Pursuant to Art. 1 of this act:
"(...) agricultural tax applies to land classified in the land and building register as agricultural land, with the exception of land used for business activities other than agricultural activities".
This means that the owner of land classified as agricultural land is obliged to pay the agricultural tax, including also the agricultural holding with a total area exceeding 1 ha or 1 conversion ha.
Pursuant to the aforementioned Act, agricultural activity is an activity dealing with plant and animal production, including:
- seed material,
- breeding and reproductive,
- vegetable production,
- ornamental plants,
- cultivated mushrooms,
- breeding and production of animal seed material,
- utility birds and insects,
- livestock production of the industrial farm type,
- fish farming and breeding.
Property tax - what is taxable?
Real estate tax issues are regulated by the Act on Local Taxes and Fees and in accordance with Art. 2 clause 1 of the Act on Local Taxes and Fees, real estate tax is subject to:
- buildings or parts thereof,
- structures or parts thereof related to running a business.
Additionally, in accordance with Art. 2 clause 2 of the Act on Local Taxes and Fees, agricultural land or forests that are not occupied for the purposes of the conducted activity are not subject to real estate tax.
Tax determination rules - applicable rates
How to calculate agricultural tax liability?
The rates used to calculate the amount of agricultural tax liability are determined annually by the President of the Central Statistical Office, based on the sale of rye in the previous 11 quarters, preceding the quarter preceding the previous year.
In 2020, the rate is PLN 58.46 per dt. On the basis of the indicated value, the agricultural tax rate for farmland was converted, which in 2020 is PLN 146.15 (equivalent to 2.5 q multiplied by 58.46) per 1 conversion ha of their area, respectively. In the case of agricultural land which does not constitute agricultural holdings, the agricultural tax rate is PLN 292.30 (the equivalent of 5 q multiplied by 58.46) per 1 ha. Pursuant to Art. 4 (1) of the Act on Agricultural Tax, the taxable amount for agricultural tax is:
- "For farm land - the number of conversion hectares determined on the basis of the area, types and classes of agricultural land resulting from the land and building records and classification to the tax district.
- For the remaining land - the number of hectares resulting from the land and building register ".
To calculate the amount of agricultural tax, it is necessary to use the conversion rates of the agricultural land area, indicated in art. 4 sec. 5 above Acts:
|Types of agricultural land: ||Arable land||Meadows and pastures|
|Agricultural land classes||
Mr. Łukasz owns a 2nd class farm, which covers 50 hectares. The commune council included the land in the 4th district. What tax should Mr. Łukasz pay in 2020?
- First, determine the value of the conversion hectare: 50 ha x 1.35 = 67.50
- Then multiply the appropriate tax rate, which in the case of Mr. Łukasz is 2.5 by the conversion hectare: 2.5 x 67.50 = 168.75
- Next, the amount of agricultural tax to be paid should be calculated by multiplying the calculated value of conversion hectares by the average purchase price of rye (58.46 PLN): 168.75 x 58.46 PLN = 9865.13 PLN
In 2020, Mr. Łukasz has to pay an agricultural tax in the amount of PLN 9,865.13
Mr. Wiesław owns non-farm arable land with a total area of 100 hectares. What agricultural tax should Mr. Wiesław pay for 2020?
- First, determine the value of the conversion hectare for the actual land area: 100 x 5 (tax rate per 1 ha, expressed in quintals, for land other than agricultural holdings) = 500
- Then the calculated value of the conversion hectare should be multiplied by the average rye purchase price (58.46 PLN): 500 x58,46 PLN = PLN 29 230.00
Mr. Wiesław has to pay the agricultural tax for 2020 in the amount ofPLN 29 230.00
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Real estate tax - detailed calculations
The subject of taxation with real estate tax, in accordance with Art. 4 sec. 1 of the Act on Local Taxes and Fees, is:
- for land - area,
- for buildings or parts thereof - usable area,
- for buildings or parts thereof related to the conduct of economic activity, subject to the provisions of paragraph 2. 4-6 - the value referred to in the provisions on income taxes, determined as of January 1 of the tax year, constituting the basis for calculating depreciation this year, not reduced by depreciation write-offs, and in the case of fully depreciated structures - their value as of January 1 of the year in which the last depreciation was made.
Although real estate tax rates are set individually by municipalities, their upper limit may not exceed the rates indicated in the Notice of the Minister of Development and Finance on the upper limits of local taxes and fees. With regard to the maximum rates in the case of land related to business activity (regardless of the method of classification in the land and building register), the tax rate in 2020 is PLN 0.95 per m² of space.
On the other hand, the tax on residential buildings related to the business activity or parts thereof used for this activity amounts to PLN 23.90 per m² of usable space. Detailed information in this regard is regulated by Art. 5 of the Act on Local Taxes and Fees.
Pursuant to Art. 4 sec. 2.The Act on Local Taxes and Fees:
"(...) the area of rooms or their parts and a part of a storey with a clear height from 1.40 m to 2.20 m are included in the usable area of the building in 50%, and if the height is less than 1.40 m, the area this one is omitted ”.
The XYZ company is the owner of a business premises located in the attic of the building, located in the Rymanów commune. The total area of the building is 120 m2
(70 m2 of the premises are 1.8 m high and the rest is over 2.20 m). What property tax will XYZ pay for 2020?
First, you need to calculate the usable area:
- 50 m2 - area with a height of more than 2.20 m
70 m2 - area between 1.4 m and 2.20 m (included in 50%) - 35 m2
tax base: 50 m2 + 35 m2 = 85 m2
- Then calculate the tax amount: 85m2 x PLN 20.00 (the tax rate on buildings or parts thereof related to business activity in the Rymanów commune) x 12/12 = PLN 1700
The XYZ company will pay the property tax in the amount of PLN 1,700 for 2020.
As a rule, in the case of natural persons, agricultural tax and real estate tax are regulated in four installments: by March 15, May 15, September 15 and November 15 of a given tax year. Payments for agricultural tax and real estate tax can be made by bank transfer to the account of the tax office or, in the case of natural persons, also in cash at the collector (if the tax is collected in the form of collection). These fees can also be paid directly at the cash desk of a given tax office (in the case of real estate tax) and at the cash desk of the commune (in the case of agricultural tax). If the tax amount does not exceed PLN 100, its fee is one-time and must be paid within the first installment, i.e. by March 15.
Agricultural tax and real estate tax, i.e. who is obliged to pay the tax?
Pursuant to Art. 6a. paragraph 1-3 of the Agricultural Tax Act and Art. 6 sec. 1 of the Act on Local Taxes and Fees, the tax obligation in agricultural tax and real estate tax arises from the first day of the month following the month in which the circumstances justifying the emergence of this obligation occurred.
In turn, on the last day of the month in which the circumstances justifying this obligation (to pay the tax) ceased to exist, this obligation expires. In the event that the tax obligation arose or expired during the year, the agricultural tax and property tax for that year should be determined in proportion to the number of months in which it existed.
With regard to real estate tax, if the circumstance on which the tax obligation depends is the existence of a structure, building or part thereof, the tax obligation arises on 1 January of the year following the year in which the construction was completed or its use began before their completion. .
On the other hand, in agricultural tax, the tax obligation arises on the first day of the month following the month in which the legal title to the subject of taxation was acquired or acquired. The tax obligation expires at the end of the month in which the circumstances justifying this obligation no longer exist.
Pursuant to Art. 3.1 of the Act on Agricultural Tax, the agricultural tax is obliged to pay the owner of agricultural land, including:
- "Land owner, subject to paragraph 2,
- independent owner of land,
- perpetual usufructuary of the land,
- the owner of land owned by the State Treasury or local government unit, if the possession of:
- results from an agreement concluded with the owner, with the National Center for Agricultural Support or other legal title, or
- is without a legal title, except for land included in the Agricultural Property Stock of the State Treasury or under the management of the State Forests; in this case, the taxpayers are, respectively, organizational units of the National Center for Support for Agriculture and State Forests ”.
In turn, according to art. 3 sec. 1 of the Act on Local Taxes and Fees, the property tax is required to pay:
- "Owner of real estate or buildings, subject to paragraph 3,
- sole owner of real estate or buildings,
- perpetual usufructuary of land,
- the owner of real estate or their parts or construction works or their parts, owned by the State Treasury or local government unit, if the possession of:
- results from an agreement concluded with the owner, the National Agricultural Support Center or other legal title, except for natural persons owning residential premises that do not constitute separate real estate,
- is without legal title, subject to paragraph 2 ".
Agricultural tax and real estate tax - summary
As a rule, the obligation to pay the agricultural tax rests with the owners of agricultural land, while the property tax is the responsibility of the property owners. The group of owners includes natural and legal persons as well as organizational units, including companies without legal personality.
Agricultural tax and real estate tax are calculated annually based on the rates announced by the authorized tax authority. However, in the agricultural tax, they constitute the basis for determining the amount of liability for a given tax year, while in the real estate tax, they constitute the maximum rates, as the exact rates are determined individually by municipalities. The amount of taxes is calculated on an annual basis and, as a rule, payable in four installments throughout its duration.
Accounting for agricultural tax and property tax in the wFirma.pl system
The wFirma.pl program provides an easy and accessible way to recognize the value of agricultural tax and property tax paid, based on the received decision. To do this, go to the tab EXPENSES »ACCOUNTING» ADD »INTERNAL ID.
Then complete the data in the ACCOUNTING SCHEME item, select BUSINESS COSTS and in the PRODUCT NAME, CHARGES OR TITLE AND EXPENSE PURPOSE field, enter what the expense relates to and in the TOTAL item - what is its value.
Expenditure booked in this way will be included in KPIR in column 13 - other expenses.