First reporting of real estate companies is approaching

The deadline for the first reporting of real estate companies and partners of such companies is approaching. New tax reporting obligations have been imposed on real estate companies and their shareholders. These obligations must be fulfilled by 31 March 2022.

Real estate companies are required to prepare information on entities holding, directly or indirectly, at least 5% of the shares (voting rights) of the real estate company as at the last day of the previous tax / financial year. This has to be reported to the National Tax Administration. An analogous obligation is also imposed on entities holding directly or indirectly at least 5% of the shares of a real estate company.

This means the obligation to report multiple times in relation to the same company in the case of complex ownership structures.

A real estate company is an entity obliged to prepare a balance sheet on the basis of accounting regulations, which meets jointly the following conditions:

• it owns, directly or indirectly, real estate located in Poland or rights to such real estate on the last day of the year preceding the tax year (or the financial year in the case of entities that are not CIT taxpayers),
• the balance sheet value of the real estate exceeds PLN 10 million and the value of the real estate constitutes at least 50% of the balance sheet value of the company’s assets (directly or indirectly),
• in the year preceding the tax year (respectively, the financial year) the entity generated at least 60% of tax revenue (or revenue recognised in the net financial result, if the real estate company is not a taxpayer of income tax) from real estate, e.g. from rent, lease, other contracts of similar nature, from the transfer of ownership, from shares in other real estate companies.

In the case of newly established companies, this criterion should be met as at the first day of the tax year (and at market value) and the criterion of achieving 60% of revenue from real estate is not taken into account then.

Notifications should be made electronically on official forms. However, such forms have not yet been made available.

How can we help?

• We will review companies to ensure they meet the definition of a real estate company under tax law.
• We will review the ownership structure of real estate companies to identify direct and indirect shareholders with reporting obligations.
• We will prepare a list of information that should be collected in order to fulfil the reporting obligations.
• We will complete the official forms (once published).