Agriculture Tax and Forest Tax

Although it is commonly believed that agriculture tax or forest tax applies only to entities engaged in agricultural or forestry activities, in practice this is not the case. Obligations in this area may affect companies operating in almost any sector, including modern technology enterprises. Therefore, in order to ensure that taxpayers fulfil their obligations properly and avoid disputes with the tax authorities, it is worth conducting a thorough analysis of the structure of the properties held. Such an analysis can be carried out with the support of RSM Poland tax advisers, who are highly experienced in the provisions of the Agriculture Tax Act and the Forest Tax Act.

What may be subject to agriculture tax and forest tax, and who is liable to pay these taxes?

Agriculture tax and forest tax are public levies imposed in Poland on owners, possessors or users of agricultural land and forests. Importantly, the tax base in each case depends not only on the area concerned, but also on other variable components.

• Agriculture tax applies primarily to land used for agricultural activities (but not exclusively) and is calculated on the basis of three factors: 
  • the area of land owned or held, 
  • the land classification category, 
  • the average purchase price of rye. 
• Forest tax applies to forests that are not used for purposes other than forestry management and is calculated on the basis of two factors: 
  • the forest area, 
  • the average price of timber. 

These taxes are payable by individuals, legal entities and organisational units holding legal title to such land, for example owners, perpetual usufruct holders or self-dependent possessors.

Scope of services relating to determining the tax base and settling agriculture tax and forest tax

As part of our tax advisory services, we:

• conduct tax analyses of agricultural holdings and land for agriculture tax and forest tax purposes, 
• prepare calculations for agriculture tax and forest tax purposes and identify the moment when the tax obligation arose,
• prepare agriculture tax returns (DR-1) and forest tax returns (DL-1), together with supporting attachments, and make corrections to those returns, 
• support taxpayers during tax audits and represent entities in disputes with the tax authorities.

It is worth remembering that the requirements of the Agriculture Tax Act apply not only to agricultural holdings

A proper assessment of a situation, preferably with the support of experienced experts, helps to avoid the risk of incorrect tax settlements. Taxpayers often mistakenly assume that, due to the classification of the land they own, it should be subject to agriculture tax or forest tax, whereas in reality it may be subject to real estate tax. The classification of land for local tax purposes is not always straightforward and requires a detailed analysis of the facts and the applicable regulations in each case. For this reason, the RSM Poland team has already provided advisory services relating to agriculture tax and forest tax to a wide range of businesses representing diverse sectors of the economy, including in particular:

• large manufacturing enterprises, 
• companies operating warehouse centres, 
• companies owning office buildings or shopping centres,
• companies operating in the renewable energy sector (including photovoltaic farms),
• amusement parks, 
• agricultural holdings, 
• dairy processing plants,
• companies operating in the defence industry. 

If you have any doubts regarding matters related to agriculture tax or forest tax, please contact us. Our experts will be pleased to answer any questions and explain how they can assist in your particular circumstances.

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