NBP head: REITs could be risky

Poland's plans to introduce law regulating real estate investment trusts (REIT) may bear risks due to the timing of the implementation, amid negative real interest rates, Polish Central Bank (NBP) President Adam Glapiński said. According to him, REITs themselves are a good investment instrument, but amid negative real interest rates, they could attract small individual investors, unaware of the risks. “I am generally in favor of REIT, this is very good, but it needs to be implemented in a proper manner with appropriate safety mechanisms,” he said. Poland wants to tax the REIT-like firms with 8.5 percent CIT rate for income allocated to dividend payments and zero tax rate for dividend income from such firms, both for retail and institutional investors. Furthermore, amortization will not be booked as a cost reducing taxable income. The institution should be introduced into Polish law by 2018.