The act on wind turbine investments (the “Act”) entered into force on 16 July 2016. One of the most important changes brought in by the Act is the definition of a wind turbine. Wind turbines now constitute buildings in accordance with the provisions of the construction law. This means that wind farm investors may see a significant increase in real property tax. 

Before the Act came into force, the taxation of wind turbines was considered in a number of court rulings as well as rulings of the Constitutional Tribunal. There were two different views on taxing wind turbines with real property tax: one was to tax the entire wind turbine and the other, which was the dominant view, was to tax only the parts of a wind turbine that constitute a building (such as the foundations and the tower). Due to the strict application of the tax law, it is questionable whether the introduction of the definition of a wind turbine in the Act is sufficient for property tax to now apply to both the building and the technical elements of a wind turbine.

Zgorzelec Municipality seems to be supporting the view dominant before the Act came into force that only the structural elements of a wind turbine should be taxed. A tax ruling dated 3 November 2016 indicates that the new Act will not result in an increase of real property tax. The wind farm investor who applied for the tax ruling in Zgorzelec Municipality will pay real property tax based on the foundations and the towers of the wind turbines from the beginning of 2017.

The taxation of wind turbines is being widely discussed in the wind farm industry. It is likely that a variety of different tax rulings will be issued until the end of 2016. Wind farm investors need to have an obvious and consistent interpretation of the definition of a wind turbine so that they will know if they will have to pay the increased property tax.