Expenses for public road as a tax expense of a real estate developer.
Letter of the Director of the National Fiscal Information dated January 26, 2021, ref. no. 0114-KDIP2-1.4010.448.2020.3.PD
The costs resulting from a contract concluded with a municipality that are related to the construction of a public road leading to a multi-family residential building with services located on a ground floor, which a real estate developer is planning to build, constitute indirect tax deductible costs of the real estate developer, as they do not directly reflect in the income obtained by the developer (the construction of the road will not mean that the developer will receive income on this account). Considering the above, the expenses of the developer will constitute tax deductible costs possible to be deducted on a one-off basis on the date of incurrence, i.e. at the moment of recognition in the books on the basis of appropriate documents (e.g. handover and acceptance protocol, evidence of transfer of funds in the form of a bank statement).
ACT ON PERSONAL INCOME TAX
Taxation of advances paid to partners (general partners) of a limited partnership.
Letter of the Director of the National Fiscal Information dated April 19, 2021, ref. no. 0115-KDIT1.4011.61.2021.1.MR.
In the opinion of the Director of the National Fiscal Information, CIT paid by a limited partnership cannot be deducted from the personal income tax charged on advances paid during the year to general partners for their share in this partnership’s profits.
In the opinion of the Director of the National Fiscal Information, CIT paid by a limited partnership may be deducted from income tax only in the annual tax return submitted by a general partner for a given tax year, and therefore only after the annual tax return of the limited partnership.
ACT ON GOODS AND SERVICES TAX (VAT)
1) The Ombudsman questions the possibility for notaries to add VAT to a notarial fee.
The Ombudsman addressed a request for clarification to the National Council of Notaries (KRN) concerning the addition of VAT by notaries to notarial fees.
In the opinion of the Ombudsman, adding VAT to notarial fees is illegal under the applicable regulations. Pursuant to the current regulations, for performing notarial activities a notary should receive remuneration not exceeding the maximum rates of notarial fees specified in the ordinance of the Ministry of Justice.
In the opinion of the Ombudsman, both the VAT Act and the ordinance of the Ministry of Justice specifying the amount of the notarial fees do not imply the notaries’ right to add VAT to the notarial fees, which means that VAT must be included in the notarial fees specified in the ordinance.
In the opinion of the Ombudsman, in practice, the notary’s remuneration should be treated as the gross price including VAT.
2) Obligation to add VAT in the case of donations made between entrepreneurs.
Letter of the Director of the National Fiscal Information dated April 14, 2021, ref. no. 0114-KDIP1-1.4012.796.2020.1.MM
According to the Director of the National Fiscal Information, in the light of the applicable regulations, free-of-charge transfer of goods as a donation in accordance with Article 7 sec. 2 point 2 of the Act on Goods and Services Tax is subject to the tax on goods and services (VAT).
However, if the goods are transferred on the basis of a donation agreement, such activity is not documented with a VAT invoice.
dr Andrzej Chełchowski
Partner, Radca prawny | Partner, Legal Advisor
T: +48 22 447 43 00
M: +48 601 694 424
E: chelchowski@millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield, and is based on the facts and guidance available at the time of its release which may be subject to change. The purpose of the publication is to draw attention to the legal events indicated in it and should not be the sole basis for any decision regarding a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.