Real estate companies (hereinafter “ReCo”) are required to provide information on their ownership structure to the tax authorities by the end of March 2024. This obligation also applies to their shareholders, including foreign entities that are not taxpayers in Poland.
Definition of a real estate company
The tax legislation provides two definitions of a real estate company, i.e. a definition for a start-up entity and a separate one for an existing company. In both cases, a real estate company is an entity other than an individual that is required to prepare a balance sheet under the accounting regulations.
Start-up entity
An entity (other than a natural person, obliged to draw up a balance sheet) in which, as at the first day of the tax year, and where the real estate company is not a taxpayer of income tax – as at the first day of the financial year, at least 50% of the market value of the assets, directly or indirectly, was the market value of real estate located in the territory of the Republic of Poland or rights to such real estate and the market value of such real estate exceeded PLN 10 million or the equivalent amount.
Existing entity
An entity (other than an individual, obliged to draw up a balance sheet) in which, as at the last day of the year preceding the tax year, and where the real estate company is not a taxpayer of income tax – as at the last day of the year preceding the financial year, at least 50% of the balance sheet value of the assets, directly or indirectly, was constituted by the balance sheet value of real estate located on the territory of Poland or rights to such real estate, and the balance sheet value of such real estate exceeded PLN 10 million or the equivalent amount, and in the year preceding the tax year or the financial year respectively – tax revenue, or, if the real estate company is not a taxpayer of income tax, revenue recognised in net profit, from lease, sublease, rental, subtenancy, leasing and other contracts of a similar nature or from transfer of ownership, the subject of which is real estate or rights to real estate, and from interests in other real estate companies, constituted at least 60% of total tax revenue or revenue recognised in net profit.
Definition of a real estate company:
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Criteria |
Start-up entity |
Existing entity |
|---|---|---|
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Moment of verification |
Balance sheet as at the first day of the fiscal (financial) year |
Balance sheet as at the last day of the year preceding the tax (financial) year |
|
Share of real estate in assets |
At least 50% of the market value of the assets, directly or indirectly, was the market value of real estate located in the territory of the Republic of Poland or rights to such real estate, and |
At least 50% of the carrying amount of the assets directly or indirectly represented the carrying amount of real estate located in the territory of the Republic of Poland or rights to such real estate, and |
|
Minimum property value |
The market value of these properties exceeded PLN 10 million or the equivalent. |
The carrying amount of these properties exceeded PLN 10 million or the equivalent, and |
|
Share of property income in total income |
n/a |
In the year preceding the tax (financial) year, tax revenue from leases, subleases, leases and other contracts of a similar nature or from the transfer of ownership, the subject of which is real estate or rights to real estate, and from interests in other real estate companies, accounted for at least 60% of total revenue. |
Reporting on ownership structure
An obligation has been imposed on real estate companies and their direct and indirect shareholders to provide the Head of Polish Tax Administration with information on entities holding directly or indirectly shares, titles, total rights and obligations and similar rights in such a real estate company.
|
Entity |
Real estate companies |
Taxpayers holding, directly or indirectly, 5% or more of shares or rights of a similar nature in a real estate company |
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|---|---|---|---|---|
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Scope of data |
Information about the entities holding, directly or indirectly, shares or other rights of a similar nature in this real estate company, together with the number of such rights held by each of them |
Information on the number of shares, total rights and obligations, participation titles or rights of a similar nature held, directly or indirectly, in the real estate company |
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Moment of verification |
As at the last day of the tax year of the real estate company or, if the real estate company is not a taxpayer of income tax, as at the last day of its financial year |
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Deadline |
By the end of the third month following the end of the real estate company’s tax year, or, if the real estate company is not an income taxpayer, by the end of the third month following the end of the real estate company’s tax year, by means of electronic communication. |
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This information obligation applies both to domestic entities and to entities that are not Polish tax residents, i.e. entities that do not have their place of residence or seat or management on the territory of Poland.
According to the general interpretation of the Minister of Finance of 28 February 2023, a “taxpayer holding (directly or indirectly) the rights to a real estate company” should be understood as:
- a shareholder/partner of a real estate company (legal persons and natural persons),
- an entity (legal persons and natural persons) that holds rights to a real estate company indirectly – where such holding of rights is implemented through so-called tax transparent entities.
According to the interpretation of the Minister of Finance, taxpayers that are exempt from corporate income tax on a subject basis, e.g. open-ended investment funds, foreign mutual institutions, family foundations, are not required to report as shareholders/ partners of real estate companies.
Forms and deadline
Reporting of the ownership structure in ReCo companies should be done on forms:
- CIT-N1/ PIT-N1 – information filed by the real estate company on its shareholders,
- CIT-N2/ PIT-N2 – information filed by the shareholder on the rights held in the real estate company.
As a rule, in order to submit the form correctly, you will need your NIP number (or Pesel in the case of individuals). The completed declaration should be submitted electronically to the competent tax office.
With respect to shareholders of real estate companies, the information obligation arises irrespective of whether income (revenue) from that shareholding was received in the tax year at the end of which the information is filed. This means that the information obligation arises from the mere fact of holding, directly or indirectly, shares in a real estate company. For foreign entities that are partners in real estate companies, this means the need to obtain a tax number (NIP) in Poland.
The information must be sent by the end of the third month following the end of the tax year of the real estate company (or the financial year of that company if it is not a taxpayer). For most entities, the deadline for filing the relevant forms is the end of March 2024, with the deadline this year being Tuesday, 2 April 2024, due to the Easter holiday.
Jurisdiction of tax offices
As the reporting of the ownership structure in real estate companies, in addition to the companies themselves, also concerns their shareholders (domestic and foreign legal and natural persons), the Minister of Finance has designated the jurisdiction of the tax authorities in a separate regulation.
According to it:
- real estate companies and partners having their registered office in Poland – submit information to the head of the Tax Office competent for them in matters of income taxation,
- real estate companies, which are not taxpayers of income tax (tax-transparent entities) – submit information to the head of the Tax Office competent for income taxation according to the address of the company’s registered office,
- real estate companies and partners who do not have a registered address in Poland – to the Head of the Third Mazovian Tax Office in Radom.
Contact
The correct classification of an entity into the real estate company category is important for ongoing tax settlements as well as reporting obligations. Check out our accounting and tax settlement services or contact us directly. We are here to make running your business easier.
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