Obligation to report the Ownership Structures of Real Estates Companies in Poland

We would like to remind you that at the beginning of 2022 was introduced the obligation to report the ownership structures of real estate companies to the tax authorities.

Who is required to provide information

This obligation is subject to real property companies and taxable persons holding, directly or indirectly, shares (stock) in a real property 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 5% share in the profit of a partnership without legal personality or at least 5% of all participation units or similar right.

According to the provisions of the Corporate Income Tax Law, a real estate company is considered to be an entity other than an individual, required to prepare a balance sheet under the accounting regulations, in which the:

• a) as at the first day of the tax year, and if the real property company is not an income tax payer – as at the first day of the financial year, at least 50% of the market value of assets equals, directly or indirectly, to the market value of real properties located in the territory of the Republic of Poland or rights to such real properties and the market value of those real properties exceeds PLN 10,000,000 or an equivalent of such an amount converted at an average exchange rate for foreign currencies published by the National Bank of Poland on the last business day preceding the first day of the tax year – in the case of entities that commence their business activity,
• b) as at the last day of the year preceding the tax year, and if the real property company is not an income tax payer – as at the last day of the year preceding the financial year, at least 50% of the carrying amount of assets equals, directly or indirectly, to the carrying amount of real properties located in the territory of the Republic of Poland or rights to such real properties and the carrying amount of those real properties exceeds PLN 10,000,000 or an equivalent of such an amount converted at an average exchange rate for foreign currencies published by the National Bank of Poland as at the last business day preceding the last day of the tax year preceding, respectively, the tax year or the financial year and in the year preceding, respectively, the tax year or the financial year taxable revenue, and if the real property company is not an income tax payer – 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, constitute at least 60% of total taxable revenues or revenues recognised in the net financial result – in the case of entities other than those referred to in point a) above.

Thus, in the case of entity which continues in 2022 its business activity, whose fiscal year coincides with the calendar year, the assessment of whether an entity meets the conditions to be considered a real estate company is made as of December 31, 2021.

Scope of information provided

The information provided applies:

• 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 real property companies,
• the number of shares, all rights and obligations, units or similar rights held, directly or indirectly, in the real property company – if the information is provided by taxable persons being partners of real property companies

In 2023, the ownership structure as at December 31, 2022 is subject to reporting.

How to provide information

The information must be submitted in electronic format corresponding to the logical structure available in Biuletyn Informacji Publicznej [the Public Information Bulletin] on the website of the office providing services to the minister responsible for public finance.

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

The deadline for submitting information

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

Considering the fact that reporting may be troublesome due to the need to determine the appropriate ownership structure, percentage and number of shares held by individual companies in a real estate company and the possible need to obtain a Polish tax identification number (NIP) for foreign entities or powers of attorney to submit forms, we suggest that you start analysing the ownership structures in real estate companies now, so as to fulfil this obligation on time.

For further information please contact:

Hubert Kaczyński
Tax Advisor
ECOVIS Poland Audit, Tax & Accounting
+48 22 380 03 80
hubert.kaczynski@ecovis.pl