Poland to introduce 8.5% tax on REIT-like firms

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 cost reducing taxable income. To be considered a REIT-like firm, companies must meet a number of criteria, including at least 90 percent dividend payout, ownership of at least three rental properties, be publicly traded. Income from asset sale could be excluded from the dividend payout obligation if such income is allocated to a purchase of a property or a real estate company. Assets of such REIT-like firm would have to consist in at least 70 percent of real estate, real estate subsidiaries and shares in peers. The new draft also assumes that such companies will be allowed to invest in housing properties, along with the commercial real estate.