What is a Real Estate Company?
A Real Estate Company is an entity obliged to prepare a balance sheet based on accounting regulations, which meets one of the following two conditions:
- (for a start-up) - on the first day of a tax year, the market value of real estate located in Poland or rights to such real estate constituted more than 50% of the market value of assets (directly or indirectly), and the value of such real estate was higher than PLN 10 mln, or
- (other entities) tax revenues in the year preceding the tax year from rental, sublease, lease, subtenancy, leasing (and other contracts of a similar nature) or transfer of ownership, the subject of which is real estate or rights to real estate, and from interests in other real estate companies, exceeded 60 percent of the company's total revenues, and on the last day of the year preceding the tax year, the market value of real estate located in Poland or rights to such real estate constituted more than 50 percent of the market value of assets (directly or indirectly), and the value of such real estate exceeded PLN 10 mln.
Who is affected by the new obligation?
The new obligation applies to both real estate companies themselves and their shareholders, who:
- have shares or stocks that entitle them to at least 5% of the voting rights;
- have title to at least 5% of profit-sharing rights, or
- have at least 5% of the total number of participation units or rights of a comparable character.
What should reporting include?
The report submitted to the head of KAS (National Tax Administrative Office) should include data on:
- entities holding, directly or indirectly, shares (stocks) in this real estate company, all rights and obligations, participation units or comparable character.
- a number of the above-mentioned rights in real estate companies.
Following the new regulation, the Ministry of Finance released new CIT-N1 (for a real estate company) and CIT-N2 (for partners for a real estate company) forms, as well as their equivalents PIT-N1 and PIT-N2.
Unfortunately, it did not resolve the problematic issues of determining the status of a real estate company, or how far to report indirect ties. Instead, there have even appeared technical issues related to sending information for a partner (foreign entity). Many entities face, for example, the question of whether they are required to have a Tax Number Identification.