The provisions of the amended 2020 Tax Law introduced new reporting obligations for real estate companies and their shareholders. For most entities, the deadline for the implementation is 31 March 2022.
New obligations for real estate companies
The amended regulations impose new obligations on real estate companies. Starting from April, companies are obliged to submit to the Head of the National Fiscal Administration information on entities holding in a given real estate company shares (stocks), all rights and obligations, participation titles or rights of similar nature, together with the number of such rights held by each shareholder. This obligation exists regardless of whether the shares are held directly or indirectly.
Furthermore, taxpayers holding, directly or indirectly, in a real estate company:
- shares (stocks) giving at least 5% of the voting rights in the company, or
- an aggregate of rights and obligations carrying at least 5% of the right to share in the profits of a company that is not a legal person, or
- at least 5% of the total number of participation titles or rights of a similar nature,
are also obliged to provide the Head of the National Fiscal Administration with additional informations:
- about the number of shares (stocks) held, directly or indirectly, in the real estate company,
- total rights and obligations,
- participation titles or rights of a similar nature.
The above obligation should be fulfilled by the end of the third month following the end of the real estate company’s tax year. This date applies to, among others, limited liability companies or limited partnerships. If the real estate company is not an income taxpayer (e.g. general partnership, civil-law partnership) – by the end of the third month after the end of the financial year of the real estate company. The information should be provided as of the last day of the real estate company’s tax year. However, if the real estate company is not an income taxpayer – on the last day of its financial year.
The same should be said of tax capital groups. In their case, the above obligations also apply to companies forming part of such a group.
A new definition of real estate companies
A real estate company is an entity other than a natural person obliged to prepare a balance sheet based on accounting regulations. The balance sheet includes:
- entities that start a business – on the first day of the tax year (or when the real estate company is not an income taxpayer – on the first day of the financial year): at least 50% of the market value of the assets, directly or indirectly, was the market value of real estate located in the territory of the Republic of Poland or rights to such real estate and the market value of such real estate exceeded PLN 10,000,000 or the equivalent of this amount determined according to the average exchange rate of foreign currencies, announced by the National Bank of Poland, on the last working day preceding the first day of the tax year,
- other entities:
- on the last day of the year preceding the tax year (or, if the real estate company is not an income taxpayer – on the last day of the year preceding the financial year): at least 50% of the balance sheet value of the assets, directly or indirectly, was the balance sheet value of the real estate located on the territory of the Republic of Poland or rights to such real estate and the balance sheet value of this amount determined according to the average exchange rate of foreign currencies, announced by the National Bank of Poland, from the last working day preceding the last day of the tax year preceding the tax year or the financial year, respectively, and
- in the year preceding the tax year or the financial year, respectively, the tax revenue or, if the real estate company is not a taxpayer of income tax, the revenue disclosed in the net financial result, from lease, sublease, tenancy, subtenancy, leasing and other contracts of a similar nature or from the transfer of ownership, the object of which is real estate or rights to real estate, and from interests in other real estate companies, constituted at least 60% of the total tax revenue or revenue disclosed in the net financial result, respectively.
The definition of a real estate company quoted above is very broad. This means that in practice very many entities will be obliged to fulfill the reporting obligations towards the tax authorities.
Draft amendment to the regulations
A draft regulation of the Minister of Finance was published on the website of the Government Legislation Centre on 17 March 2022. This draft is related to changes in the deadline for submitting information on real estate companies. According to its content, the deadline for filing information on rights in real estate companies would be extended to 30 September 2022 for companies whose tax year or financial year ended between 31 December 2021 and 31 May 2022.
The explanatory memorandum shows that there is currently a lack of IT tools to send information by electronic means. Such an option, in turn, will not be possible until May 2022 at the earliest.
Considering the wide range of entities obliged to file the report, we recommend analyzing the asset and ownership structure in the owned companies as soon as possible. We also invite you to contact us to verify whether you are obliged to meet the reporting obligations.
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