Two solutions have recently been presented that are of significant importance to those who want to invest in stocks, investment funds, bonds, and bank deposits. The Ministry of Development and Technology presented the principles of the Act on Real Estate Investment Companies (REITs), while the Ministry of Finance presented the principles of changes to the capital gains tax (Belka tax). Let's take a closer look at the content of these principles.
SINN – Real Estate Investment Companies (REITs)
REITs are collective real estate investment vehicles. They offer an alternative to direct real estate investment. They allow the purchase of shares in a company that leases properties. This allows for a significantly lower capital investment than would be required for individual property purchases.
Currently, it's possible to invest in foreign REITs. They operate in over 40 countries, including 13 in Europe. American REITs are the longest-established, having first been established in the 1960s.
Under Polish law, REITs will operate exclusively as joint-stock companies. They will be able to invest in offices, shopping centers, residential buildings, apartments, social care homes, boarding houses, and student dormitories located in Poland. Dividend payment will be mandatory. The company will be required to allocate at least 90% of its rental income, net of expenses and taxes, to dividends.
Changes to the Belka tax
The exemption for dividends received from REITs is consistent with the proposal to abolish the capital gains tax, also known as the Belka tax. The government has outlined the main assumptions for the changes to this tax. These primarily involve the introduction of a tax-free amount, which would be determined by multiplying the National Bank of Poland (NBP) deposit rate on the last day of the third quarter of the year preceding the tax year by PLN 100,000 (currently PLN 5,250). This amount would be calculated separately for gains on term deposits and bonds, and for equity investments.
A taxpayer wishing to take advantage of the exemption for savings on term deposits or bonds will need to open a deposit or purchase bonds at a bank (SKOK) that will maintain a savings package for them (separately for deposits and bonds). The bank (or SKOK) will not withhold tax on such a savings package up to the tax-free amount.
In the case of capital investments, the taxpayer will settle the tax-free amount himself in the annual PIT-38 tax return.
Under the proposed framework, taxpayers could save approximately PLN 3,000 in tax (if they take advantage of the tax-free allowance for deposits, bonds, and equity investments). The tax-friendly solution itself should be viewed positively. However, it does not simplify the already complex and case-based tax system in any way.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of April 8, 2024
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