The taxable base for CIT/MIT purposes is the initial value of buildings less the amount of PLN 10 million (ascertained as of the first day of each month). The CIT/MIT rate is 0.035%.  

In calculating the CIT/MIT due, it is necessary to have a list of buildings updated on a monthly basis listing their initial values and leased area. CIT/MIT is not applicable where the leased area does not exceed 5% of the total area of the building.

Example:  

A taxpayer shows in its fixed asset records a building of which it is owner. In July 2022 its initial value is PLN 20,000,000 and its area is 1,000 m2. The taxpayers lets 80% of the available area to other entities. The CIT/MIT will be calculated in the following manner: (1) CIT/MIT taxable base: 80% * PLN 20,000,000 = PLN 16,000,000zł, then 16,000,000 – 10,000,000 = PLN 6,000,000, (2) calculation of CIT/MIT: PLN 6,000,000 * 0.035% = PLN 5,600. 

If a taxpayer holds a share in another entity’s capital, as an entity related to it, the amount decreasing the taxable base is determined in the proportion in which the revenue from buildings remains to the total amount of such revenues of the taxpayer and entities related to it.  

Example:  

Company A owns a building let entirely to other entities, noting monthly revenues on that account of PLN 20,000,000. Moreover, the Company holds a 70% share in the capital of Company B and a 50% share in the capital of Company C. Companies B and C also have in their fixed asset records buildings which they let, with the respective revenues from the buildings being as follows: Company B – PLN 12,000,000; Company C – PLN 18,000,000. In the month in questions, in Company A, the amount decreasing the CIT/MIT taxable base (being a pro rata reduction in the revenues from fixed assets of related companies of the statutory amount of PLN 10,000,000) will be calculated as follows:  (1) PLN 10,000,000 x [PLN 20,000,000/(PLN 20,000,000 + PLN 12,000,000 + PLN 18,000,000)] = PLN 4,000,000. Hence, Company A’s CIT/MIT taxable base in the month in question will be as follows: (1) 20,000,000 – 4,000,000 = PLN 16,000,000, (2) whereas CIT/MIT due will amount to: PLN 16,000,000 x 0,00035 = PLN 2,100.  

CIT and PIT payers are required to calculate the CIT/MIT tax every month and pay it into the tax office’s bank account by the 20th day of the month following the month for which the tax is due. Taxpayers can also deduct the CIT/MIT amount paid for a given month from the amount of their income tax advance.  If such advances are paid on a quarterly basis, the tax on the revenue from buildings is deductible for each month of a quarter.  

Where the CIT/MIT due for a given month exceeds the amount of CIT advance, then the taxpayer will reduce the CIT advance due for that month. Hence, only CIT/MIT will be paid without the advance being paid.  

Example: 

A CIT advance in a Company is PLN 7,000, with CIT/MIT being PLN 10,000. In this case, the Company pays the CIT/MIT in full, but does not pay the CIT advance as the CIT/MIT fully covers the advance. 

Where the amount of CIT/MIT due for a given month is lower than the CIT advance, the taxpayer has two options open to him: (1) only pay the CIT advance for that month or (2) pay CIT/MIT and the CIT advance reduced by the CIT/MIT paid.  

Example: 

A CIT advance in a Company is PLN 23,000, with CIT/MIT being PLN 10,000. In this case, the Company can: (1) only pay the CIT advance in the amount of PLN 23,000 or (2) pay the CIT/MIT of pLN 10,000 and a CIT advance in the amount of PLN 13,000. 

Tadeusz Wnuk

Tax Consultant, ATA Tax Sp. z o.o.

Interested in the subject?

tadeusz.wnuk@atatax.pl