Real estate companies - obligation to submit information to KAS by 30 September

Real estate companies - obligation to report to KAS

According to the Minister of Finance Regulation of 30 March 2022, the deadline for submitting information for real estate companies with a tax year or financial year ending between 31 December 2021 and 31 May 2022 is 30 September 2022.

The obligation to submit information on the shareholding structure is imposed on taxpayers who hold in a real estate company:

• shares entitling to 5% or more of voting rights,
• a total of rights and obligations giving entitlement to 5% or more of the right to share in profits,
• a minimum of 5% of the total number of participation units or rights of a similar nature.

Real estate companies are entities meeting the following two conditions:

• a minimum of 50 per cent of the value of the assets are real estate located within Poland,
• and a minimum of 60 per cent of the value of revenue in the company's net result comes from these real estate assets.

The submission of information by real estate companies, in accordance with the Minister of Finance's Regulation, is done by sending electronic forms containing a report on, among other things, the company's shareholders to KAS.

Information to KAS - problems with e-Forms

Information on the shareholding structure of the real estate company is sent to KAS via electronic forms CIT-N1 and PIT-N1 and CIT-N2 and PIT-N2, where:

• CIT-N1 is the information submitted by a real estate company about its shareholders,
• CIT-N2 is the information submitted by a shareholder about the rights held in the company,
• PIT-N1 is the information submitted by a real estate company about the entities holding rights to the company,
• PIT-N2 is information filed by a shareholder about the rights held in the real estate company.

The problem with filling in and sending the forms provided by the Ministry of Finance mainly concerns foreign entities and taxpayers, who, among other things, need to:

• have a Polish tax identification number NIP for companies
• have a Polish PESEL identification number for natural persons,
• have a qualified electronic signature.

Foreign entities obliged to report to the Head of KAS must therefore have a NIP tax identification number in order to complete the electronic forms. In order to obtain such a number, it is necessary to apply to the Polish tax authorities for its assignment.

Moreover, the forms are available in Polish, which may be a language barrier for foreigners who do not speak Polish.

Real estate companies - doubts about who to report to

Since the beginning of the introduction of reporting obligations, there has been a lot of information about the fact that information should be submitted to the Head of KAS. However, with the publication of the Regulations of 13 July 2022 issued by the Ministry of Finance (Journal of Laws 2022 item 1508 and item 1507), real estate companies no longer report directly to the Head of KAS.

As the regulation states, the tasks of the Head of the National Tax Administration in receiving and processing information from real estate companies are to be assigned to:

• The head of the tax office:
  • competent for the real estate company on matters of corporate income taxation, on the last day of the company's tax year, if the real estate company is a corporate income taxpayer,
  • competent for corporate income tax according to the address of the registered office of a real estate company situated in the territory of the Republic of Poland, resulting from the relevant register or from the articles of association or contract, if the address of the registered office of the entity is not disclosed in the relevant register, determined on the last day of its financial year - if the real estate company is not a taxpayer of income tax,

• The Head of the Third Mazovian Tax Office in Radom - if a real estate company does not have an address of its registered office within the territory of the Republic of Poland as determined on the last day of its tax year or financial year, respectively, resulting from the relevant register or from the articles of association or contract of a company, if the address of the registered office of the real estate company is not disclosed in the relevant register.

The above-mentioned instructions became effective on 20 July 2022, so real estate companies do not currently report to the Head of KAS, but to the relevant heads of tax offices of the Republic of Poland.

Deadline for submitting information on shareholding structure - ambiguities

According to a Regulation of the Minister of Finance of 29 March 2022, the deadline for providing information on real estate companies has been extended until 30 September 2022.

The Regulation applies to real estate companies and partners of such companies for which the tax year or financial year ended between 31 December 2021 and 31 May 2022.

For real estate companies for which the tax year ended before 31 December 2021, the deadline has not been extended.

The statutory deadlines for the submission of shareholder structure information in force prior to the issuance of the above Regulation are as follows:

• by the end of the third month after the end of the tax year for a real estate company being a CIT taxpayer, and
• by the end of the third month after the end of the financial year for a non-CIT company.

The Regulation of the Minister of Finance came into force on 31 March, the day before expiry of the statutory deadline. Some companies may therefore have submitted the required information earlier. If so, do they have to resubmit or do they have to fill in new e-forms? Doubts are multiplying.

Re-reporting and previously submitted information

As we mentioned above, some companies may have already submitted their shareholding structure information before the deadline was postponed until the end of September and before the new electronic forms for reporting were published. Should these entities therefore resubmit the information on the new forms?

According to the experts, if the previously submitted information meets the statutory conditions, there is no need to submit the information again just because new forms have been made available. The lack thereof earlier was not dependent on a taxpayer and, in the light of the regulations, the taxpayer has fulfilled the obligation required by the CIT or PIT Act.

Submission of shareholding structure information - contact Crowe tax experts 

Real estate companies - extensive reporting to KAS

The extent of reporting can be terrifying and the number of attachments may make many taxpayers feel overwhelmed. For example, every direct and indirect partner who is a taxpayer in Poland is obliged to report on its real estate company if its share in the real estate company exceeds 5 per cent.

In addition, each company is required to report on each of its shareholders with at least a 5 per cent stake on a separate attachment. It is therefore not worth delaying the submission of the required information until the last minute, this task may require a considerable amount of time and work.

Crowe tax advisory - tax reporting in the hands of experts

Failure to submit tax information - heavy fines

The challenges faced by real estate companies submitting tax information are not the only ones. Companies and their shareholders may be subject to high fines for failing to submit shareholding information on time or for submitting incorrect data.

Fines can range from 120 through 180 to as many as 240 daily rates, with the minimum rate in 2022 being (1/30 × PLN 3,010) - PLN 100.33 and the maximum daily rate being (PLN 100.33 × 400) - PLN 40,132.

This is because a fine for a fiscal offence is imposed in daily rates. The daily rate cannot be less than 1/30th of the minimum remuneration for a given year, nor can it exceed the amount of four hundred times this. In 2023, fines for fiscal offences will increase even further, as the 2023 minimum pay will go up sharply.

Foreign real estate companies - appointing a fiscal representative

While discussing the tax reporting obligation, it is also worth mentioning that under the existing regulations and the CIT Act, a real estate company which is a foreign entity, i.e. which does not have its registered office or board in Poland, is obliged to appoint a fiscal representative. The fiscal representative is to act for and on behalf of a company fulfilling at the same time the obligations of a payer.

Explore the service: Fiscal representation for foreign companies

The lack of a fiscal representative is subject to a fine of up to PLN 1 million. However, companies taxed with income tax on their entire income in one of the EU or EEA countries are exempt from this obligation.