The sale of an enterprise’s assets is, as a rule, settled within the scope of economic activity. Is this rule always applied to the disposal of immovable property?

The lawmaker has stipulated that the disposal of immovable property against payment may be made within the scope the economic activity or beyond it. In general, residual immovable properties are excluded unconditionally. According to Article 14 item 2c of the Personal Income Tax Act (Journal of Law of 2012, item. 361, as amended), the disposal against payment of such immovable properties, which are used for the purposes of conducting business activity, is not considered business activity. It is classified under sources of revenue from the transfer of immovable property (Article 30e of the Personal Income Tax).

And the transfer of non-residential immovable property? According to Article 14 item 2 of the Personal Income Tax Act, revenues from gainful disposal of assets used for the purposes of the business activity should be included in the revenues from the business activity other than agricultural activity, provided that the following two conditions are met. Firstly, it should be a tangible asset. Secondly, it should be indicated in the list of tangible and intangible assets.

There have been some doubts in practice concerning transfer of immovable property used for business activity, which, however, has not been indicated in the list. There were some discrepancies between the interpretations applied by the administrative courts. According to some of them, in such case the taxpayers do not fulfill their obligations resulting from Article 22d item 2 of the Personal Income Tax Act. The above provision stipulates that taxpayers are obliged to indicate the tangible assets within the list of tangible assets. The issue has been finally settled with the Resolution of the Seven Judges of the Chief Administrative Court (NSA) of February 17, 2014 (Ref. No. II FPS 8/13), adopted upon application of the Ombudsman. The court adjudicated that the transfer against payment of immovable property or part thereof, used for purposes of economic activity, which were not indicated within the list of tangible and intangible assets, is not to be classified as revenue from the business activity.

Dr. Janusz Marciniuk
Tax Advisor, Marciniuk & Partners
Dziennik Gazeta Prawna, May 19, 2014