New definitions: building, structure, construction
Instead of the previous references to the Building Act, the amendment contains standalone definitions:
A building is a structure:
- erected as a result of construction works
- together with installations ensuring that it can be used for its intended purpose
- permanently attached to the ground
- having foundations, a roof and structural partitions
Structures in which capacity is the primary technical parameter determining their intended use are excluded from this definition.
A closed list of structures falling under the definition of a building has been introduced. Structures currently classified as such include, amongst others:
- wind farms, nuclear power stations and photovoltaic power stations, biogas plants, agricultural biogas plants, energy storage facilities, boilers, industrial furnaces – in the part not constituting a building – exclusively in respect of their structural components
- building equipment – connections and installation equipment, including those used for the treatment or collection of wastewater, and other technical equipment directly associated with a building or structure, necessary for their use in accordance with their intended purpose
- technical installations – in respect of their structural components
A building or structure is defined as any building or structure, including their installations and technical equipment.
The primacy of a building over a structure
The legislator has stipulated that if a structure meets the criteria for a building, it must not be taxed concurrently as a structure, even if it is among the structures listed in the Act (the so-called principle of priority). Only where a structure does not meet the statutory criteria for the definition of a building may its classification as a structure be considered.
Taxation of selected assets in the energy sector
In the case of wind farms, the tax applies only to those parts that constitute a structure, i.e. the tower and the foundation. Other components, such as the nacelle, rotor or blades, are treated as technical equipment and are therefore not subject to taxation.
As regards photovoltaic installations, only the foundations and supporting structures are subject to taxation. In contrast, photovoltaic modules, inverters and electrical installations are not included in the tax base.
Transformers may be subject to taxation as part of a building if their proper functioning depends on being attached to a building. Otherwise, they are treated as a structure, but only in respect of elements of a structural nature and only if they were created as a result of construction works.
Transformer stations may be regarded as buildings if they are permanently fixed to the ground and have foundations, a roof and walls. However, transformer stations in the form of containerised units, even if permanently fixed to the ground, are subject to taxation as structures.
Power networks, comprising both overhead and underground cables, are classified as structures based on length. Together with remotely controlled switches, they are subject to taxation as a single structure.
Switchgear typically meets the definition of a building, as it has a body and a roof, and should therefore be taxed as a building. However, busbar systems and switchgear are not included in the tax base.
Energy storage facilities in the form of containerised battery storage units, which do not require construction work, are generally not subject to property tax. However, where foundations and connection installations have been carried out, the part constituting a structure is subject to taxation.
Fences constitute a structure, but are subject to taxation only if they are used for business purposes.
Legal uncertainties regarding the new regulations
The Act still uses imprecise terms, such as ‘construction facility’ or ‘industrial installation’, without providing their legal definitions. Such ambiguity may give rise to disputes over the interpretation of the provisions.
An additional problem is the lack of a clear methodology for valuing the new categories of structures. In particular, the question arises as to how to determine the initial value – and thus the tax base – in the case of, for example, a prefabricated foundation moved from another site. The application of general depreciation rules in such situations may lead to further interpretative discrepancies and disputes with the tax authorities.
Recommendations for the energy sector
Measures to minimise tax risks include conducting regular tax audits and reviews, both internal and external. It is also important to engage the services of professionals specialising in property tax, who can correctly classify individual assets in accordance with the new definition of a building or structure and verify the correctness of the tax base calculation.
It is recommended to monitor emerging guidelines from the Ministry of Finance, individual interpretations and the case law of administrative courts on an ongoing basis, as the practice of applying the new regulations is still evolving and has not yet been established.
Businesses should be prepared for the possibility of disputes with the tax authorities, as the lack of established practice regarding the application of the new regulations increases the risk of interpretative discrepancies. Therefore, it is advisable to ensure, as early as the implementation stage, that technical documentation, detailed descriptions of fixed assets and legal opinions justifying the adopted classification of assets are properly secured. Experience from previous amendments shows that a stable line of case law usually only emerges after several years.
Summary
The 2025 property tax amendment constitutes a significant reform in the way assets are taxed. The correct classification of each asset in accordance with the new statutory definitions will be of key importance, as will the ongoing monitoring of the practices of tax authorities and administrative courts. Companies that update their records and internal procedures in advance will be better prepared for any audits and will minimise the risk of costly tax disputes.
The practice includes ongoing advice on administrative and tax law. He has extensive experience in handling judicial, administrative, tax and judicial-administrative proceedings concerning both individual clients and business entities, including that gained through many years of providing services to local government units and other units of the public finance sector.
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