Poland: Definition of structure for real estate tax purposes held unconstitutional (Constitutional Tribunal decision)

A Constitutional Tribunal decision concerning the definition of structure for real estate tax purposes

A Constitutional Tribunal decision concerning the definition of structure for real estate

The Constitutional Tribunal on 4 July 2023 held (case file SK 14/21) that the definition of “structure” under Article 1a(1)(2) of the Act on Local Taxes and Duties, applicable for real estate tax purposes, was unconstitutional.  


A joint-stock company asked the tax authority to confirm that it overpaid real estate tax for 2010-2015 because its warehouses (silos) were classified as structures in its real estate tax return, but the correct classification and corresponding taxation was as buildings. The tax authority denied the request, which was subsequently upheld by the Local Government Board of Appeal, the Regional Administrative Court, and the Supreme Administrative Court. Consequently, the company lodged a constitutional complaint.

The taxpayer argued that its silos demonstrated all statutory features of buildings (and displayed no additional features), which are taxed according to their usable area and not their initial value. Because its silos did not display additional features exceeding the statutory scope of the “building” definition, they could not be treated as “structures” for real estate tax purposes.

The Constitutional Tribunal held that the statutory definition of “structure” was sufficiently imprecise and indefinite as to be unconstitutional.

By force of the judgment, the statutory definition of “structure” will lose legal effect 18 months after publication of the judgment in the Polish Journal of Laws. During this period, the legislator is expected to enact new regulations in this regard.

Read a July 2023 report prepared by the KPMG member firm in Poland


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