LEGAL COUNSEL, COUNSEL AT WKB WIERCIŃSKI, KWIECIŃSKI, BAEHR and LEGAL COUNSEL AT WKB WIERCIŃSKI, KWIECIŃSKI, BAEHR
As a result of the obligations imposed on Poland by EU law, the Ministry of Infrastructure and Development established a committee, whose work has led to the creation of the draft Construction Code (the “Code”). The primary objective of the proposed regulation, apart from the need to implement EU rules, was to increase the transparency and stability of construction law and consequently eliminate uncertainties, systematize provisions of law scattered in different acts, and simplify the construction process. The draft code is currently at the public consultation stage, during which, 53 posts with comments have been reported as so far. The new regulation will replace the current Building Law, which has until now been amended more than 70 times, as well as the Act on Building Products.
Among the comments submitted to the draft Code, the main issue centers on the definition of “structure” (in Polish: “budowla”) and “civil structure” (in Polish: “obiekt budowlany”). The definitions contained in current legislation provide the basis for determining property tax, in accordance with the Act on Local Taxes and Fees. The detailed meaning of these definitions has been shaped by extensive case law. Moreover, the current definition of structure is a combination of a negative definition and an extensive list of exemplary structures with diverse features (“any civil structure, which is not a building or small architecture, such as: (…)”).
In the new legislation, a structure is defined as any civil structure, which is neither a building nor elements of so-called “small architecture”, and construction elements of machinery. A civil structure is defined as a building, structure or an element of small architecture […]. Even though it is stated in the explanatory memorandum to the Code that the change in both definitions is purely editorial, it entails a risk concerning the interpretation of tax provisions. The risk is compounded by the fact that the proposed wording of the definitions is imprecise. Both definitions define each other mutually, which poses additional difficulties in understanding their meaning. The current definition of structure, supported by case law, facilitates the use of a uniform interpretation. Although the concept of simplifying definitions seems to be sensible, defining “unknown by unknown” creates doubts with very costly possible consequences. Notes on the discussed issue can, so far, be found in seven comments to the draft Code. This makes it the main issue raised in the course of public consultation. Keeping the proposed wording of the above definitions in the final version of the Code may result in lengthy proceedings with tax authorities with a view to rebuilding what has already been built, which seems to be contrary to the leading objective of the proposed regulation, i.e. transparency and simplification of the construction process.