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Wind farms – Seven judges will resolve how to calculate real property tax


The extended bench of the Supreme Administrative Court will decide whether municipal authorities are allowed to collect the tax only on the construction part (i.e. erected with using construction materials) or also on technical facilities of a wind farm.

The problem arose in connection with the provisions of the Act on Investments in Wind Farms, effective as of 1 January 2017, which changed, among others, definition of a construction structure in the Construction Law. As a result, according to tax authorities and some administrative courts, the taxable base of wind farms must include also the value of non-construction components – such as e.g. rotor shafts with blades, generators, control systems. In consequence, the real property tax burden of wind farm operators has increased even as much as threefold.

Let us remind that the Act on Local Taxes and Charges defines a construction structure by reference to definition of a building structure included in the Construction Law. Pursuant to the Tax Act, a construction structure shall be understood as a building structure that is not a building or a small architecture structure, as well as a building facility within the meaning of the Construction Law connected with a building structure that ensures the use of the structure in accordance with its purpose. At the same time, pursuant to the Construction Law a building structure shall be understood as a building, a construction structure or a small architecture structure together with installations that ensure the use of the structure in accordance with its purpose, erected with using construction materials. So doubts may be raised for example whether the extension in the Act on Investments in Wind Farms of definition of a construction structure, as included in the Construction  Law, by technical facilities (components), is not contrary to a condition that a building structure must be erected with using construction materials. We should also remind that already in 2011 the Constitutional Tribunal presented clear guidelines as to interpretation of the notion of a construction structure for the purpose of real property tax (judgment of 13 September 2011, case ref. no. P 33/09).

In view of such wording of the provisions of law and unfavourable for taxpayers position of tax authorities and administrative courts, we cannot be surprised by the number of cases related to taxation of wind farms which were to be handled in the nearest time by the Supreme Administrative Court. Now they will be resolved by way of a resolution of the seven judges. What is also important, legislative works are underway on the Act that is to reverse changes in the disputed definition of a construction structure and consequently taxation of wind farms will go back to previous principles, which are definitely much more favourable for taxpayers.

It is difficult to foresee at the moment when we can expect a decision of the extended bench. Unfortunately, cases related to local taxes and charges are not among those heard fast. Nevertheless, hoping to a favourable resolution, it is worth considering right now whether it would not be good to initiate interpretation proceedings so as to recover possible overpayment as soon as possible.


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Barbara Otrzonsek

Konsultant podatkowy,  ATA Tax Sp. z o.o.