Last moment for real estate companies to comply with the reporting obligations
30 September marks the end date for informing the Head of National Fiscal Administration (KAS) about entities holding shares, interest, general rights and obligations or similar entitlements, either directly or indirectly, in a real estate company.
What is a real estate company?
As a reminder, a real estate company is an entity other than a natural person, obliged to prepare a balance sheet as required by the accounting regulations, in which:
– for an entity commencing operations:
- at least 50% of the market value of its assets as of the first day of the year (tax or financial year) consisted, either directly or indirectly, of the market value of real estate located in Poland or rights to such real estate, and
- the market value of such real estate exceeds PLN 10 million or the equivalent of this amount.
– for an existing entity:
- at least 50% of the balance sheet value of its assets as of the last day of the preceding year (tax or financial year) consisted, either directly or indirectly, of the balance-sheet value of real estate located in Poland or rights to such real estate, and
- the balance sheet value of such real estate exceeded PLN 10 million or the equivalent of this amount.
- in the preceding year, the income of this entity from lease, sublease, tenancy, leasing and other similar agreements or from transfer of ownership of the real property or rights to real property and from shares in other real estate companies made up at least 60% of all income.
For CIT payers, the tax year and tax income are taken into account when determining whether the definition of the real estate company is fulfilled, whereas for entities which are not CIT payers, the financial year is taken into account and the income recognized in the net financial result.
Who does the reporting obligation apply to?
The obligation to report applies to real estate companies and taxpayers who hold, either directly or indirectly, shares or general rights and obligations in a real estate company, which give at least 5% of the overall number of equity participation or similar rights.
What is to be reported?
For real estate companies information should be provided about entities holding, directly or indirectly, shares or other rights of similar nature in such a company, and the number of rights held by each of them. Reports are made as of the last day of the year (tax or financial year).
For taxpayers holding (either directly or indirectly) 5% of shares information should be provided about the number of shares held (either directly or indirectly), general rights and obligations, participation share or rights of similar nature.
How to comply with the reporting obligation?
The website of the Ministry of Finance contains template forms to be used to file the above information:
CIT-N1- a form to be filed by real estate companies
CIT-N2- a form to be filed by shareholders of real estate companies
The forms should be submitted to the competent Tax Office using electronic means.
How can we help?
The regulations governing the reporting obligations raise a number of practical doubts. It is not clear which entities are obliged to submit the CIT-N2 declaration (how to understand the term “taxpayer directly holding shares in a real estate company”) and whether foreign shareholders should apply for the Polish tax identification number (NIP). The Ministry of Finance issued the relevant information on 30 September 2022. However, it seems to make taxpayers’ situation even more complex.
If you need assistance, we are ready to help you comply with the reporting obligations for real estate companies. You are welcome to contact us.
KONTAKT
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