Ladies and Gentlemen ,
the Act of 19 June 2020 on interest subsidies for bank loans granted to entrepreneurs affected by the effects of COVID-19 and on the simplified procedure for approval of an arrangement in connection with the occurrence of COVID-19 (Journal of Laws of 2020, item 1086), referred to as the anti-crisis shield 4.0, has brought solutions important not only for entities operating on the real estate market, but also for entrepreneurs who are perpetual usufructuaries, tenants, lessees or otherwise use real estate owned by the State Treasury .
the deadline for paying the annual fee for perpetual usufruct for 2020 has been extended once again .
At the same time, it is worth emphasizing that there was no change in the deadline for payment of the fee for transformation of the right of perpetual usufruct of land into ownership, which expired on 30 June 2020. Despite the statutory authorization, the Minister of Development did not decide to issue a regulation specifying a later deadline for payment of this fee.
Secondly, the legislator, when amending the Act of 2 March 2020 on special solutions related to the prevention, counteraction and combating of COVID-19, other infectious diseases and crisis situations caused by them (Journal of Laws, items 374, 567, 568, 695 and 875), added Articles 15ja-15je, which introduce solutions for entrepreneurs using real estate for business purposes.
In this alert, we would like to draw your attention primarily to the right to a reduction in the fee for perpetual usufruct of land belonging to the State Treasury's real estate holdings . Under this new solution, businesses, as well as designated non-governmental organizations and state-owned legal entities that have experienced a decline in business turnover as a result of COVID-19 and are perpetual usufructuaries of land used for business purposes, will be able to apply for a fee reduction.
The condition for obtaining a reduction is:
- reporting the payment of a reduced fee to the staroste or mayor of a city with district rights performing government administration tasks before 31 January 2020;
- no arrears in settling tax liabilities, social security contributions, health insurance, Guaranteed Employee Benefits Fund, Labor Fund or Solidarity Fund until the end of the third quarter of 2019;
- decline in economic turnover due to COVID-19, which the Act understands as a decline in sales of goods or services, in terms of quantity or value:
- not less than 15% , calculated as the ratio of the total turnover during any two consecutive calendar months specified in the period after 31 December 2019 to the day preceding the date of notification, compared to the total turnover during the same two consecutive calendar months of the previous year; or
- not less than 25% , calculated as the ratio of turnover from any given calendar month falling after 31 December 2019 to the day preceding the date of notification, compared to the turnover from the previous month.
- in both cases, a month is also considered to be 30 consecutive calendar days if the comparative period begins during a calendar month, i.e. on a day other than the first day of a given calendar month.
If the above conditions are met, the authority should reduce the fee proportionally to the number of days in 2020 during which the state of epidemic threat and the state of epidemic due to COVID-19 were in effect . Given that the state of epidemic threat was declared on March 14, 2020, and the state of epidemic continues, as of the date of this alert, the number of days by which the fee may be reduced is 111.
In the opinion of the Law Firm, both entrepreneurs who have already paid the perpetual usufruct fee for 2020 and those who have not made such payment under the extended deadline can apply for a reduction .
Before deciding to submit an application, please remember that the fee reduction constitutes state aid intended to remedy a serious disturbance in the economy, as referred to in the Commission Communication – Temporary Framework for State aid measures to support the economy in the context of the ongoing COVID-19 outbreak. This means that the authorities will require the submission of appropriate documentation and then verify the amount of state aid previously received from other anti-crisis shield instruments (e.g., downtime benefit, exemptions from social security contributions).
Third, we would like to point out that the Act gives businesses the opportunity to submit an application for exemption from the collection of rent, lease, and usufruct fees payable to the State Treasury for the three months in 2020 following the month in which the application is submitted . The conditions for obtaining an exemption are defined analogously to those related to the reduction of perpetual usufruct fees.
The above applies only to entrepreneurs – perpetual usufructuaries, tenants, and lessees of land owned by the State Treasury. In the case of land owned by municipalities, counties, or voivodeships, Article 15jd of the Anti-Crisis Shield 4.0 granted local government units the authority to adopt a resolution regarding (i) reducing the annual fee for perpetual usufruct of real estate belonging to the municipal, county, or voivodeship real estate resources, respectively, used for conducting business activities, due for 2020 from the entities indicated above, and (ii) not collecting rent, lease, or fees for commissioning the real estate for the next three months in 2020 following the month in which the notification was submitted. Therefore, the granting of such an authority in relation to land owned by local government units will depend on the decisions of individual municipalities, counties, and voivodeships, which reflects the established view of their autonomy in these matters.
In summary , the implemented solution is a response to requests from businesses, who requested not only extensions of payment deadlines but also partial write-offs. However, this is not a comprehensive solution, as it does not apply to land that has undergone transformation or land owned by local government units. Furthermore, quick processing of applications for fee reductions is not expected – if only because the epidemic is still ongoing, the authority is unable to definitively determine the number of days for which such reductions would apply.
If you have any individual questions or concerns, please contact us.
This material is for informational purposes and does not constitute legal advice. It was prepared on the basis of the Act of 19 June 2020 on interest subsidies for bank loans granted to entrepreneurs affected by COVID-19 and on the simplified procedure for approval of an arrangement in connection with the occurrence of COVID-19 (Journal of Laws of 2020, item 1086) and the Act of 2 March 2020 on specific solutions related to the prevention, counteracting, and combating of COVID-19, other infectious diseases and the resulting crisis situations (Journal of Laws, items 374, 567, 568, 695, and 875).
