CIT and the real estate investor

The planned amendment to the act on corporate income tax (CIT) could have a significant impact on the effective tax on real estate investment in Poland for a number of reasons. Firstly, it introduces restrictions on the deduction of taxable income from the interest on bank loans taken out in order to purchase properties. These costs constitute a highly significant factor in the calculation of CIT tax. Interestingly, the restrictions would not include the interest paid by alternative investment funds (AIF), so the types of investment that would be subject to the AIFMD (Alternative Investment Fund Managers’ Directive) would be impacted by the amendment to a lesser degree. Limiting the possibility of including expenditure on non-material services – such as consulting or management services – in the tax rate levied seems completely unjustified. According to the Ministry of Finance, such expenditure does not constitute remuneration for actual services but is rather a per