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Advicero Tax Nexia | Taxation and renewable energy | February 2019

1. The coal traders with new responsibilities

2. Thermal modernization allowance

3. EU agreement on the management of the Energy Union

4. The tax authorities are bound only by data from the land registry

  1. The coal traders with new responsibilities

Since January 1, 2019, the seller of coal products, in order to apply an exemption from excise duty for coal products delivered to final coal buyers, is obliged to issue an invoice containing the CN number of coal products and their quantity expressed in kilograms (or draw up a list of final coal buyers entitled to receive coal allowance) and also obtain a declaration from the final coal buyer that the purchased coal products are intended for the purposes of exemption from excise duty (i.e. coal buyer is obliged to make a statement about the intended use of bought coal products for heating purposes).

However, it should be emphasized that the newly introduced duty is binding only for single purchases of coal products with the amount exceeding 200 kilograms. Transactions smaller than indicated amount do not have to be documented in this way. Moreover, forms for documentation purpose will differ depending whether the acquirer will be an individual or legal person.

2. Thermal modernization allowance

From 2019 taxpayers who are owners or co-owners of a single-family residential building have the right to a special tax allowance in the form of a deduction from income of expenses for thermal modernization of single-family residential buildings. The deduction can be made in the amount of 23% of total expenditure on the purchase of building materials, equipment and services related to the implementation of the thermo-modernization undertaking, incurred between January – December 2019.

The allowance applies only to owners or co-owners of single-family residential buildings – which are understood as free-standing buildings or semi-detached or group buildings, which serve for housing purposes only. Such buildings must constitute as a constructively independent unit, in which it is allowed to separate no more than two dwellings or one dwelling and business premises with a total area not exceeding 30% of the total area of ​​the building.

Both, entrepreneurs who own property used for residential purposes and individual owners have the right to the thermal modernization allowance.

3. EU agreement on the management of the Energy Union  

Representatives of the EU Member States and the European Parliament agreed on new regulations to ensure that the EU meets the 2030 climate and energy goals.

The new regulations oblige Member States to prepare national plans for the period from 2021 to 2030. They have to cover all five dimensions of the Energy Union:

(1) security, solidarity and trust,

(2) internal energy market,

(3) demand reduction,

(4) reduction of emission intensity together with energy from renewable sources,

(5) research, innovation and competitiveness.

The regulations are to ensure monitoring of progress at the level of EU countries in order to achieve binding EU targets for renewable energy sources, i.e. energy efficiency and the target level of 15%.

Furthermore, under the climate and energy policy, the EU want to achieve three main goals by 2030. They are:

(1) a reduction of at least 40% greenhouse gas emissions,

(2) ensuring at least a 27% share of energy from renewable sources in total energy consumption and

(3) increasing by at least 27% energy efficiency.

4. The tax authorities are bound only by data from the land registry

Recent judgement of the Voivodship Administrative Court in Olsztyn passed December 20, 2018 (file number I SA/Ol 420/18) confirmed that the binding source of information for the tax authorities when determining the subject to real estate tax (RET) is the land register.

During the judicial proceedings, the taxpayer argued with court whether his land should be classified as subject to agricultural tax or RET. The taxpayer claimed that the land should be subject to agricultural tax due to its agriculture nature confirmed by copies of lease contracts.

The court did not agree with the taxpayer statement and indicated that the basis of tax assessment is only the data contained in the land and building register. It is an official and binding source of information used in tax proceedings and there are no exceptions to this rule.

The court emphasized that when determining the amount of tax liability, the authorities cannot apply a different basis of assessment than resulting from the register. Thus, additional documents indicating other nature of the land (i.e. agricultural) are insignificant in this case. The tax authorities are bound only by data from the land registry when determining RET amount.

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