The Ministry of Finance is working on expanding the scope of the property tax. The introduction of the proposed changes will consequence in taxation of non-ecclesiastical organizational units specified as chapels or crosses. The task can be utilized to preach a false communicative about the “new taxation privilege of the church”. The proposal raises a number of interpretational doubts and problems with determining the taxable person.
What's to be taxed?
According to the project[1], the taxation will include, for example, network, method or utility infrastructure belonging to legal persons, as well as tiny architecture facilities specified as chapels, roadside crosses, sacred figurines, garden water fountains and statues (e.g. garden gnomes), pergols, water meshes, cascades, stone gardens, brick garden barbecues, sandboxes, benches, swings, ladders, winds, poles or dumpsters[2].
Small architecture facilities are presently not subject to property tax. The plan definition of the structure does not mention this category of facilities at all, so that they could be taxed as falling within the proposed Article 1a(1)(b)[3].
“New taxation privilege” for the Church
The extension of the property taxation to tiny architecture is simply a serious problem, as the taxation on figures, crosses or chapels would be paid by the landowners on which they are planted, or mostly private entities. The same facilities placed on church grounds would not be subject to taxation due to the exemption of individual ecclesiastical legal persons from Article 55(4) of the Act on State relations with the Catholic Church[4], which provides that ‘ecclesiastical legal persons shall be exempt from taxation and benefits to the municipal fund and the municipal fund, from immovable property or parts thereof which are owned or utilized by them under another legal title for non-residential purposes, but for the part occupied for the pursuit of economical activity’. akin taxation exemptions apply to all churches and another spiritual unions with regulated position in the Republic of Poland[5].
As a result, the proposed changes will be affected by natural and legal persons with land-based properties, while akin objects placed on church grounds will be excluded from the taxation obligation. As shown above, it will be nothing new, for example Article 55(4) of the Act on the State's Relation to the Catholic Church has been in force since 1989, but it is not hard to know that the expansion of the taxation on fresh facilities excluding the spiritual communities will be utilized to attack these entities from the position of establishing a "new taxation privilege for the Church" – in a Catholic guess.
Tax on the chapel on the basis of the entrepreneur?
According to Article 2(1)(3) of the Local Taxes and Charges Act[6], property taxation shall be subject to constructions or parts thereof relating to the pursuit of economical activity. This provision provides for an additional exemption from taxation of structures on church grounds. However, there remains a full bunch of crosses, chapels, holy figures, etc., located on private land – for example, owned by enterprises, State Forests, and even on land with unestablished property. In the second case, there will be a problem with establishing the owner, i.e. the payer and possibly linking the building to the business. This would concern situations where, for example, the chapel was planted 300 years ago in a circumstantial location, and the ownership and usage of the land changed.
While it can be presumed that a chapel standing on the grounds of an entrepreneur who, for example, is not straight linked to his business activity, the same chapel standing in front of a department store can lead the taxation administration to the other explanation and consequently be taxed. This is how the desire to resolve the interpretational doubts that have grown around the current wording of the recipe raises new, possibly even more absurd problems.
Ministry of Finance: Mea culpa
A remark to the Ministry of Finance was submitted to the draft law on the deficiency of dismissal of tiny architecture facilities. The hotel replied that "the issue of tiny architecture facilities will be regulated in the task and discussed in the explanatory memorandum"[7]. This may mean that the task will be corrected accordingly. The game is about millions of fresh taxation facilities.
The Ministry of Finance ensures that the taxation of tiny architecture facilities will be clarified in the draft so that there is no explanation uncertainty in the future. If the officials are aware of the request for change, this message should be read no little than admitting the responsibility of infidelity in preparing the first draft.
The Ordo Iuris Institute will monitor legislative work on the task and give an opinion on their outcome.
Dr Łukasz Bernaciński – associate of the Board of the Ordo Iuris Institute
[1] See the draft Act amending the Agricultural taxation Act, the Act on Local Taxes and Fees, the Forest taxation Act and the Act on taxation Fees, No from the list of UD72 available at: https://legislation.rcl.gov.pl/project/1238622/catalog/13064866#13064866 (accessed: 31 July 2024).
[2] Cf. Controversial thought of the finance department. He wants a taxation on chapels and crosses., https://businessinsider.com.pl/law/taxes/taxes-from-cap-controversial-controversial-project-resort-finance/3fe3s5c (accessed: 31 July 2024).
[3] According to the proposed provision, the construction is part of the construction of equipment not forming part of the structures referred to in point (b) of the first subparagraph. a.
[4] Act of 17 May 1989 on the State's relations with the Catholic Church in the Republic of Poland, OJ of 2023, item 1966.
[5] Cf. Article 13(6) of the Act of 17 May 1989 on guarantees of freedom of conscience and religion, diary of Laws of 2023, item 265; Art. 40(4) of the Act of 4 July 1991 on the ratio of the State to the Polish Autokephal Orthodox Church, diary of 2023, item 544; Art. 34(3) of the Act of 13 May 1994 on the State's Relation to the Evangelical-Augsburski Church in the Republic of Poland, diary of 2023, item 509 t.; Art. 19(3) of the Act of 13 May 1994 on the State's Relation to the Evangelical-Reformed Church in the Republic of Poland, diary of 2015, item 483 t.; Art. 28(2) of the Act of 30 June 1995 on the State's Relation to the Seventh-day Adventist Church in the Republic of Poland, diary of 2022 of June 1995, Art.
on the ratio of you to the Evangelical-Methodistic Church in the Republic of Poland, diary of Laws of 2023, item 85; Article 27(2) of the Act of 30 June 1995 on the ratio of you to the Polish Catholic Church in the Republic of Poland, diary of Laws of 2023, item 51; Article 25(2) of the Act of 20 February 1997 on the ratio of you to the judaic denominations in the Republic of Poland, diary of Laws of 2014, item 1798; Article 24(2) of the Act of 20 February 1997 on the ratio of you to the Catholic Church of the Mariavits in the Republic of Poland, diary of 2023, item 8.; Article 26(2) of the Act of 20 February 1997 on the ratio of you to the Church of the Old Catholic Mariavits in the Republic of Poland, diary of 2023, item 47.
[6] Law of 12 January 1991 on local taxes and charges, OJ of 2023, item 70.j.
[7] Cf. Comments on the draft Act amending the Agricultural taxation Act, the taxation and Local Fees Act, the Forest taxation Act and the taxation Act available at: https://legislation.rcl.gov.pl/project/1238622/catalog/13064866#13064866 (accessed: 31 July 2024).
