The widely commented draft amendment to the Corporate Income Tax Act published on September 15, 2020 imposes on a specific group of entities new obligations to report publicly on the implementation of the tax strategy for a given year.
In the justification to the draft amending act, we read that this obligation applies to taxpayers „whose revenues in the previous year exceeded the PLN amount corresponding to EUR 50 million, as well as taxpayers operating in the form of a tax capital group (PGK), regardless of the amount of revenues achieved by such a group”. A careful reading of the proposed provisions leads though to quite different conclusions.
Namely, the proposed provision of the new article 27c of the CIT Act imposes a reporting obligation on taxpayers referred to in art. 27b paragraph. 2 of this act. Indeed, in its current wording, this applies to two groups of taxpayers:
1. tax capital groups, regardless of the amount of generated revenues;
2. taxpayers other than tax capital groups where the value of the revenue obtained in the tax year referred to in paragraph 1 exceeded the equivalent of EUR 50 million converted into zlotys at the average EUR exchange rate announced by the National Bank of Poland on the last working day of the calendar year preceding the year of disclosing individual taxpayers’ data to the public.
Let us not forget, however, that the planned amendment expands the catalogue of entities specified in Art. 27b paragraph. 2 of the CIT ACT adding to it real estate companies, including real estate companies that are part of a tax capital group (PGK). Therefore, reading only the justification to the amendment may give the wrong impression that real estate companies remaining outside the PGK and not generating revenues above EUR 50 million will remain outside the scope of the reporting obligation
As a reminder, the amended act will recognize a real estate company as an entity, including a non-corporate entity, in which at least 50% of the market value of assets in any period of 12 consecutive months were real estate located in Poland or rights to such real estate.
Therefore, in the current shape of the proposed amendment, each real estate company will be subject to the reporting obligation of the tax strategy.
Was this procedure the legislator’s goal? It is hard to conclude, the next few weeks will bring an answer to this question.
Read also: Revolution in CIT 2021 for the Real Estate sector
