“Options to counteract abrupt increase in real estate tax burden for wind farms” seminar

Data: 2016-07-13

“Options to counteract abrupt increase in real estate tax burden for wind farms” seminar

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Join us during the “Options to counteract abrupt increase in real estate tax burden for wind farms” seminar

Join us during the “Options to counteract abrupt increase in real estate tax burden for wind farms” seminar, which will be held on 13 July 2016 in Warsaw.

The Distance Act has been signed by President. Although some amendments proposed by representatives of the wind energy sector have been included, the Act is fatal for the industry. Among others, it features a 4-fold increase in real property tax base. The amendment modifies the Building Code’s definition of a structure, in accordance whereof the current wording, limiting the tax base to the foundation, ring and tower is to be repealed.

For structures, the real property tax is charged on gross book value of an investment, hence – notwithstanding depreciation – each year it is charged at a rate of 2% on the same CAPEX value. In theory communes may apply rates lower than the statutory 2%, but in practice they rarely do so. The 2% tax on structural part of wind turbines already constitutes a substantial burden of the project’s profitability, however included in the calculations. The future tax in the amount of 2% on the full CAPEX of wind turbines, where the electro-technical part (nacelle, rotor) on average accounts for 75-85% of CAPEX, will increase four or even fivefold.

TPA Horwath experts will present assumptions to a proven and safe method for an effective decrease of the tax. The solution bases on restructuring and requires fulfilment of certain conditions that will be discussed in detail during the workshops. A separate part of the workshops will discuss crucial aspects of revaluation of assets in a company’s balance sheet in conjunction with a permanent loss of project value.

Experts from Radzikowski, Szubielska i Wspólnicy sp.k. law firm will present the development of the courts’ opinions concerning the real property tax over the past 25 years and try to draw conclusions regarding future trends in judicial practice. This is a difficult task, for the legislator is continuously “experimenting” with structures, sometimes leaving an impression of not being fully aware of the consequences of such experiments, not only for taxpayers, but also for the communes’ budgets. This year’s Wind Energy Investments Act is an example of such conduct.

Adverse effects of the new legislation may to some extent be alleviated by communes through their constitutional tax powers. However, they are subject to certain limitations. Do such powers include legal basis for the communes to “negotiate” tax rates? What obstacles can be encountered? Individual interpretations constitute the second, next to negotiations, “indisputable” method to minimise adverse tax effects of the Wind Energy Investments Act. The procedure creates an opportunity to convince commune authorities, using legal arguments, that the conclusion where the new regulations require taxing actually the entire wind turbine investment value is premature. Should these methods fail, one can use the ultimate weapon: tax dispute with local authorities, which most likely will end in an administrative court. Some entrepreneurs will consider a potential adjustment to the activity structure as a measure to decrease tax base for the turbines. Do they expose themselves to an allegation of tax avoidance? During the seminar the experts from Radzikowski, Szubielska i Wspólnicy sp.k. law firm will try to answere these and other questions.

  • PWEA Sponsoring Members – PLN 1,000.00 zł + VAT
  • PWEA Supporting Members – PLN 1,200.00 zł + VAT
  • Associations, universities, state R&D institutes, ecological and industry associations – PLN 600.00 zł + VAT
  • Other – PLN 1,500.00 zł + VAT
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