Ownership structure of real estate companies in Poland: New tax reporting obligations

The obligation to report the ownership structures of real estate companies to the tax authorities was already introduced at the beginning of 2022. Companies must now take urgent action, as March 31 is the deadline for filing information for 2022. The Ecovis experts know what needs to be done.

Who is required to provide information?

The obligation applies to real estate companies and taxable persons holding, directly or indirectly, shares (stock) in a real estate company which entitle them to at least 5% of voting rights in the company, or all rights and obligations which entitle them to at least a 5% share in the profit of a partnership without legal personality, or at least 5% of all participation units or similar rights.

Under corporate income tax law, a real estate company is an entity other than an individual required to prepare a balance sheet under the accounting regulations, in which:

• For entities commencing their business activities
  As at the first day of the tax or financial year, at least 50% of the market value of assets equals, directly or indirectly, the market value of real properties located in the territory of the Republic of Poland or rights to such real properties with a market value in excess of PLN 10,000,000 or the equivalent as determined by an average exchange rate published by the National Bank of Poland.
• For other entities
  As at the last day of the year preceding the tax or financial year, at least 50% of the book value of assets equals, directly or indirectly, the book value of real properties located in the territory of the Republic of Poland or rights to such real properties with a book value in excess PLN 10,000,000 or the equivalent as determined by an average exchange rate published by the National Bank of Poland and;

In the preceding tax or financial year, revenue recognised in the net financial result from rental, subrental, lease, sublease, or other similar agreements, or from the transfer of ownership in relation to real properties or rights to real properties and from shares in other real property companies constituted at least 60% of total taxable revenues or revenues recognised in the net financial result.

The assessment of whether a given entity meets the conditions to be considered a real estate company is made as at the last day of the year preceding the tax year or the financial year of the real property company.

We can assess you if you are subject to the reporting obligation and prepare all the necessary data and documents.

Hubert Kaczyński, Tax Advisor, ECOVIS Poland Audit, Tax & Accounting, Warsaw, Poland

Scope of information required

The following information must be provided:

• If the information is provided by real estate companies – entities holding, directly or indirectly, shares, all rights and obligations, units and similar rights in the real property company, including the number of such rights held by each entity
• If the information is provided by taxable persons as partners of real estate companies – the number of shares, all rights and obligations, units or similar rights held, directly or indirectly, in the real estate company

In 2023, the ownership structure must be reported as at 31 December 2022.

How to provide information

The information must be submitted in electronically in the format specified in the Public Information Bulletin (Biuletyn Informacji Publicznej) on the website of the office providing services to the minister responsible for public finance.

In practice, this means forms CIT-N1, CIT-N-2, PIT-N1 and PIT-N2, which are submitted via the electronic tax return submission system (e-Deklaracje).

Deadline for submitting information

While the deadline for submitting information in 2022 (for 2021 data) has been extended to 30 September, the deadline in 2023 (for 2022 data) expires on 31 March 2023.

The Ecovis advisors point out that reporting can be difficult. This is because of the need to determine the appropriate ownership structure, percentage and number of shares held by individual companies in a real estate company, as well as the possible need to obtain a Polish tax identification number (NIP) for foreign entities. Powers of attorney may also be required to submit forms. Companies should start analysing the ownership structures of real estate companies now, so that they can fulfil the obligations on time.

For further information please contact:

Hubert Kaczyński, Tax Advisor, ECOVIS Poland Audit, Tax & Accounting, Warsaw, Poland
Email: hubert.kaczynski@ecovis.pl