Real estate companies - the reporting deadline is approaching

On January 1, 2021, a new concept of " Real Estate Company" was introduced into Income Tax Law. By the end of September, entities that fall within the definition of this term will have to fulfill a new reporting obligation.
Author:
Hanna Polańska
Tax Compliance Manager

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.

According to the regulation of the Minister of Finance, the deadline for submitting such information is September 30, 2022.

Important!

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.

Order online advice

Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

usersearthmagnifiercrossmenuarrow-right