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Coping with Covid-19 - the Business Response

Property tax relief in the context of the Covid-19 Shield Act and tax law

By Katarzyna Klimczyk, tax advisor, manager at Accreo Sp. z o.o.
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The Covid-19 crisis has been a huge shock for global economy. Globally, a great many businesses have been closed or are working at a much slower pace. In the worst situation are owners of commercial spaces who are no longer receiving the income from their lessees. Nonetheless, the tax burdens must be still regulated – in particular, the property tax, which is a considerable income for municipalities. Let see whether any opportunities are proposed for Polish businesses in this regard.

Solutions given in the Covid-19 Shield Act


In the Act of 31 March 2020 amending the primary Shield Act regulations were introduced with respect to property tax.


The first of these solutions relies on the possibility of introducing for part of 2020 an exemption from property tax: land, buildings and structures related to running a business. These were added to article 15p in the Act on Covid-19.

It is also possible to extend as the deadlines of payment of property tax installments payable in April, May and June 2020, until no later than 30 September 2020. In the case of individuals, this solution may be applicable to installments payable by 15 May, and in the case of businesses, to installments of tax due to be paid by 15 April, 15 May and 15 June.

Both solutions will be applied on the basis of a resolution of the municipal council (gmina), to businesses whose liquidity has deteriorated due to the negative economic consequences of the pandemic. The resolution shall specify groups of entrepreneurs able to take advantage of such support (those carrying out certain types of activity, those who suspended their activity, or recorded a certain decrease in income from their activity).

This support constitutes public aid aimed at remedying the serious disturbances in the economy referred to in the European Commission communication - Temporary Framework for State Aid Measures to Support the Economy in the Context of the Ongoing COVID-19 Epidemic  
(2020 / C 91 I / 01) (Official Journal EU C 91I of 20/03/2020, p. 1).

Having in mind the above, the Polish competition and consumer protection office UOKiK in its letter of 2 April 2 (https://www.uokik.gov.pl/) indicated that support provided in such forms by local government units, both as part of resolutions and individual decisions, will not require notification to its office, or to the European Commission. Adopting a given resolution on the basis of the Shield Act is therefore tantamount to applying the appropriate conditions under the above-mentioned Temporary Framework.

The problem is that at present few municipalities have introduced a resolution which could exempt some businesses from payment of their property tax. Although local authorities have offered some tax relief to taxpayers, it has not been in the form of a tax exemption. It is possible to extend payment dates, but such request submitted by tax payers are considered individually. And there is no versatile form of tax relief in which a tax-payer can apply for in every municipality on the Polish territory – this obstacle results from the autonomy of local authorities.

Tax reliefs included in Tax Ordinance Act

Apart from Shield Act regulations, there’s are still the possibility to request the relief mentioned in Tax Ordinance Act. According to art. 67a, at the taxpayer's request, the tax authority, in cases justified by the important interest of the taxpayer or the public interest, may:

  • defer tax payment deadline or spread the tax payment into installments;

  • defer or split into installments the payment of tax arrears together with interest for late payment or interest on unpaid tax advances;

  • cancel in whole or in part tax arrears, default interest or a prolongation fee.

In this regard it must be stated that the conditions for postponing mentioned deadlines are the same as conditions concerning application of reductions in the payment of tax liabilities – there has to be something called ‘important taxpayer interest’ or ‘public interest’.

Both the taxpayer's important interest and public interest are the so-called general clauses and therefore the tax authority has a certain margin of discretion both in the interpretation of such terms and in assessing the actual situation of the case.

As a result, it is extremely important to use the jurisprudence developed in this matter. As indicated, for example, by the Provincial Administrative Court in Gliwice in its judgment of 15 July 2010. "(...) as a consequence, the tax authority's determination of the existence of the ‘public interest’ condition implies the need to weigh the relationship in two dimensions: one level is the rule of full-time tax payment, the other is an exception to the rule, consisting in the application of an individual tax credit. The authority in a given case should determine what is more advantageous from the point of view of the public interest (recovery of claims or application of a discount).

So – each request for deferment of payment of the tax liability is considered individually, whereby both the taxpayer's important interest and the public interest are assessed.

In the light of the latest guidelines of the Ministry of Finance, the tax offices shall consider taxpayers' applications quickly and without excessive bureaucracy. This mainly applies to industries that have been banned from operating, such as transport, tourism, culture, gastronomy. According to the Ministry standpoint, if the taxpayer has never previously benefited from public aid and has no other debts, they do not have to submit a property declaration. Unfortunately, tax authorities are still demanding an exorbitant amount of financial documentation, even though they already has the taxpayers’ results for 2019!

This is confirmed by tax advisory environment. According to recent comments, some taxpayers who have recently applied for tax reliefs, including for property tax, have received requests to support it with additional information, such as employment numbers, bank account balances, property and its valuation for collateral etc. Businesses have also be asked to justify that the relief in terms of the impact it will have on the further functioning of the company.

To sum up the Ministry of Finance encourages tax offices to postpone payment deadlines and divide taxes into installments, but it is up to the heads of local tax offices to decide about tax relief on their own. Therefore, they may be also responsible for any violation of public finance discipline. Hence their fear of granting relief if it is not properly justified and documented.

More in Coping with Covid-19 - the Business Response:

Polish and UK state aid for business in the face of Covid-19 – a comparative take

By Konrad Kąkol, president of the supervisory board of Dauman Bros. EEIG, advocate


Even though it’s far too early to class the effects of the Covid-19 pandemic on the global economy, these will obviously be staggering, as consumption rates fell sharply and certain economic sectors came to a grinding halt. Public aid will be indispensable in ensuring that many businesses, especially micro-entrepreneurs and SMEs, are able to stay afloat. The Polish government is still working on ironing out the creases in new versions of its so-called ‘anti-crisis shield’.

Covid-19 and international trade

By Natalia Jodłowska, attorney at law, Gessel Attorneys at Law


Although international trade may seem to be only one of numerous sectors affected by the Covid-19 pandemic, disturbances at the initial stage of a trade chain may cause a domino effect on various business activities, with implications for individual lives and for public health.

How quickly can you rewrite your business continuity plans?

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Should multinational companies rewrite their corporate business continuity plans (BCPs) to incorporate global pandemics?  This is a case study of the experiences of PM Group – an international provider of specialist engineering, construction, and project management services.

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