{"id":9909,"date":"2025-02-04T18:02:56","date_gmt":"2025-02-04T17:02:56","guid":{"rendered":"https:\/\/jklaw.pl\/prawo-budowlane-2025-co-musisz-wiedziec\/"},"modified":"2025-02-07T17:17:05","modified_gmt":"2025-02-07T16:17:05","slug":"construction-law-2025-new-regulations-new-challenges-and-upcoming-key-obligations","status":"publish","type":"post","link":"https:\/\/jklaw.pl\/en\/construction-law-2025-new-regulations-new-challenges-and-upcoming-key-obligations\/","title":{"rendered":"Construction Law 2025: New regulations, new challenges, and upcoming key obligations"},"content":{"rendered":"\n

We would like to continue discussing the topic of changes related to real estate law that we began with the legal alert published on December 30, 2024. Today, we would like to present several new pieces of legislation that have just come into force or will soon come into force and discuss interesting new case law that may change the current line of interpretation. Here is an outline: Wojciech Ko\u017ami\u0144ski focused on the issue of settling fit-out <\/em>costs, Patryk Grochowski analyzed the new regulations concerning the construction of playgrounds by developers, and Jakub Kania and I examined some of the new requirements for building design and construction.<\/h3>\n\n\n\n

Settling \u201cfit-out\u201d costs proportionally to the length of the lease<\/h2>\n\n\n\n

Last year, in addition to the significant normative changes for entrepreneurs operating in the real estate market, some potentially crucial judgments were also issued. They may be considered an essential contribution to changing the current jurisprudential line and interpretation of the law, including in the field of tax regulations (not only by administrative courts but also by the tax authorities).<\/p>\n\n\n\n

The judgment of the Supreme Administrative Court of September 3, 2024, ref. no.: II FSK 1486\/21<\/strong> should be regarded as precedential in several respects. First and foremost, this judgment may significantly impact not only the method of settling fit-out costs<\/em> but also other indirect costs incurred by entrepreneurs over time, and for which only a one-off settlement was previously considered correct.<\/p>\n\n\n\n

What are the fit-out <\/em>costs?<\/h3>\n\n\n\n

The term “fit-out <\/em>” has not yet been legally defined, and it is not perceived uniformly in the construction and renovation industry[1]<\/a>. To analyze the ruling discussed, we will assume that fit-out costs refer to all the activities, finishing, and arrangement works performed by a specialized entrepreneur to meet the needs of the property’s tenants (in this case, office space).<\/p>\n\n\n\n

Such arrangements can be primary and secondary.<\/p>\n\n\n\n

In the case of works performed for the first time after the building has been put into use (primary fit-out<\/em>), the execution of fit-out works may include, among other things, internal installations, finishing of floors, ceilings, and walls, as well as the installation of reception furniture. Primary fit-outs <\/em>does not include elements that can independently constitute a fixed asset within the meaning of Article 16a Section 1 of the Corporate Income Tax Act of February 15, 1992 (hereinafter referred to as “CIT<\/strong>“).<\/p>\n\n\n\n

In the judgment discussed, the company also conducted what are known as secondary fit-outs<\/em>, which refer to the arrangement works for the needs of new (subsequent) office space tenants. As indicated by the Supreme Administrative Court, secondary fit-outs, <\/em>in this understanding, do not include improvements or elements that could independently constitute a fixed asset within the meaning of Article 16a Section 1 CIT, nor do they increase the value in use of fixed assets, as they involve renovations closely related to a specific tenant (e.g., finishing the walls in the colors or with the logo of a given tenant).<\/p>\n\n\n\n

The approach of tax authorities to settling the costs of interior design works<\/h3>\n\n\n\n

In the case in which the mentioned judgment was issued, the company performing fit-out work applied to the Director of the National Revenue Administration Information Center (hereinafter referred to as the “KIS Director<\/strong>“) for an individual interpretation, among other things to obtain confirmation that expenses on secondary fit-outs <\/em>(i.e., those not covered by the outlays resale) constitute tax-deductible costs proportionally to the length of the period to which they relate.<\/p>\n\n\n\n

This would mean that you could deduct one-fifth of the expenses each year for a five-year lease.<\/p>\n\n\n\n

The applicant included the expenses for secondary fit-outs <\/em>among the so-called indirect costs, which are settled in proportion to the duration of a given lease agreement, pursuant to Article 15 Section 4d CIT (i.e., costs of obtaining revenues, other than costs directly related to revenues, are deductible on the date they are incurred. If these costs relate to a period exceeding the tax year, and it is impossible to determine which part of them relates to a given tax year, in such a case, they constitute costs of obtaining revenues in proportion to the length of the period to which they relate)<\/em>.<\/p>\n\n\n\n

The Director of KIS, in individual interpretation <\/strong>no. 0111-KDIB1-3.4010.451.2020.1.APO, responded negatively<\/strong> to the question of \u201cwhether the expenses incurred by the applicant for secondary fit-outs, which are not covered by the resale of outlays, constitute costs of obtaining revenues other than those directly related to the revenues referred to in Article 15 Section 4d CIT, in proportion to the length of the term of the given lease agreement.\u201d<\/em><\/p>\n\n\n\n

The Voivodeship Administrative Court and the Supreme Administrative Court disagree with the tax authorities<\/h3>\n\n\n\n

The company appealed the individual interpretation mentioned above. By its judgment of September 15, 2021, in case ref. no.: III SA\/ Wa 260\/21, the Voivodeship Administrative Court in Warsaw overruled the appealed individual interpretation in the part recognizing the applicant’s position as incorrect. It primarily indicated that “it follows from the content of Article 15 Section 4d CIT that the principle is to deduct indirect costs on the date they are incurred unless the two conditions indicated in the second sentence of this provision are met. Then, the legislator requires that a given cost be settled proportionally to the length of the period it relates to. For such a settlement to occur, the indirect cost must therefore relate to a period exceeding the tax year (the first condition) and it cannot be possible to determine what part of it relates to a given tax year (the second condition), then the legislator requires that a given cost be settled in proportion to the length of the period to which it relates<\/em>.”<\/p>\n\n\n\n

Additionally, as the Voivodeship Administrative Court correctly pointed out, regarding the discussed scope of fit-out performance in the context of a lease, there is no transfer of ownership of the item from the lessor to the lessee, unlike in instances of a sale or a loan. The lessor’s performance should be classified as continuous, while the lessee’s is generally periodic. The fit-outs performed <\/em>are of a material nature and generally lose their functionality upon the termination of the lease agreement, which demonstrates their connection to the validity period of that agreement.<\/p>\n\n\n\n

The Director of KIS filed a cassation appeal against the judgment, primarily arguing that the first sentence of Article 15 Section 4d CIT should apply in this case. In his opinion, the expenses in question should be considered as the costs of obtaining revenues other than costs directly related to revenues but deductible on the date they were incurred.<\/p>\n\n\n\n

In its judgment of September 3, 2024, ref. no.: II FSK 1486\/21, the Supreme Administrative Court rejected the Director of the National Revenue Administration Information Center position, thus agreeing with the taxpayer<\/strong>. Consequently, the Supreme Administrative Court rejected the tax office’s reasoning regarding the possibility of only one-off settlement of fit-outs<\/em>, which in practice can, if the statutory conditions are met, be settled proportionally to the length of the period to which they relate.<\/p>\n\n\n\n

The judgment discussed is crucial for entrepreneurs in the real estate industry\u2014especially for those taxpayers whose activities, particularly commercial ones, require settling costs over time. It also reaffirms the common belief that the positions of tax authorities and institutions\u2014including individual interpretations reflecting the authority’s stance on potential settlement methods\u2014can be significantly criticized and occasionally overturned in practice, provided the correct legal interpretation is applied and the taxpayer’s specific and clearly expressed factual premises are met.<\/p>\n\n\n\n

Playgrounds outside the investment area \u2013 what changes were made in 2024 to the technical conditions that buildings and their location should meet?<\/h2>\n\n\n\n

The state before the amendment<\/h3>\n\n\n\n

Do 1 sierpnia 2024 r. place zabaw i rekreacji nie by\u0142y przedmiotem szczeg\u00f3\u0142owej regulacji. Zadbano jedynie o takie aspekty jak:<\/p>\n\n\n\n