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We raised this issue some time ago. The possibility of taking advantage of the milder taxation of 8.5%, described at the time, was not so obvious, and the regulations governing this issue were still interpreted in various ways.

This situation may change after the judgment of the Supreme Administrative Court of August 13, 2020 (II FSK 960/18) is announced. The taxpayer owned several properties that he rented. He did not run a business, he was a regular employee and this job was his main source of income.

The most problematic for the judge was to decide whether the lease is organized economic activity or is incidental and private. From the very beginning, the taxpayer argued that the legislator did not clearly and precisely define the principles of taxation of rental income.

The judge found some of the taxpayer’s arguments accurate. First of all, those concerning the similarity between the two types of lease. In the opinion of the Court, both the first and the latter type of lease are characterized by some kind of organization, continuity and profit-making nature. In the opinion of the judge, the difference appears in the number of rented real estate as well as in terms of the intended use of the premises (for private and economic purposes). Oddly enough, the difference in the amount of rental income was not indicated.

The main basis for recognizing that the lease offered by the taxpayer was private – was the fact that he had a different source of income.

Moreover, the judgment underlined that each case is different and that all circumstances should be subject to individual assessment.

In a word, the judge expressed the view that a natural person who does not conduct business activity and who owns and rents several private properties may benefit from flat rate taxation.

To sum up – the judgment described above will certainly influence the assessment of the taxpayer’s situation in terms of the possibility of applying the flat rate of 8.5%. The decision made in this case may contribute to the formation of a case law favorable to taxpayers.