Polish case on real estate tax led by MDDP before the CJEU
The hearing in the precedent-setting Polish case on the real estate tax, led by MDDP, was held before #CJEU on the July 8th. The client and MDDP were represented in Luxembourg by Rafał Kran and Monika Dziedzic.
Polish Supreme Administrative Court did not clarify whether private railway sidings can benefit from real estate tax exemption. It decided that the Polish legislation should be dealt with by the Court of Justice of the European Union. Current proceedings on the topic have been suspended. If the verdict is in favour of taxpayers then those who have paid the tax will have a basis to apply for a refund of the overpayment. If the judgment is negative, this may allow municipalities to recover tax from taxpayers who took advantage of the exemption.
The verdict will be of significant importance for owners of railway sidings, who are today wondering whether the lack of taxation was legal, whether it will still be possible to recover overpayments or whether the tax will have to be returned with interest?
CJEU will decide what to do about tax reliefs
The problem, however, is not only with the Polish solution, but broadly with tax relief for non-harmonised taxes. The European Commission would expect to have the power to review all national solutions that in its view could be selective. This limits the tax autonomy of states. This approach has already been curbed by the Court in the Engie judgment of December 2023. But it appears that doubts remain and the MDDP-led case proves to be an ideal reference point. During the hearing, the example of the deduction of donations in income taxes was mentioned as an example of a measure that could potentially be challenged if the EC were to be granted, so the potential impact of the judgment could be very significant. The CJEU Advocate General’s opinion will be issued on 7 November.