By the end of October, all members of capital groups doing business in Poland which are mandatorily required to file CbC reports ('country-by-country reports' or 'CbCR') must file a notice to the Head of the National Revenue Administration (KAS - Krajowa Administracja Skarbowa) whereby they will indicate their designated 'reporting entity' to file the 2016 CbCR.
What corporate groups are required to file CbCRs? Starting from the fiscal year 2016, all corporate groups (whether domestic or foreign) meeting certain statutory criteria must file country-by-country reports. This duty falls on 'corporate groups', as defined by applicable accounting regulations, which fulfill the following conditions:
- consolidated financial statement is prepared for the group;
- the group consists of at least two enterprises having their registered office or management in different countries or territories, or an entity having its registered office or management in one country but conducting business operations through a foreign permanent establishment domiciled in a different country or territory,
- consolidated revenues of the group exceeded the PLN equivalent of EUR 750 million in the previous fiscal year.
The CbC report is submitted by only one group member – usually the ultimate parent company or a 'reporting entity' designated by the parent.
Who must file a notice re: CbC reporting?
While only one group member is required to file a CbC report, the obligation to file a notice informing the tax authorities which group member will prepare and file CbCR applies to a larger number of entities. Namely, each member of a corporate group mandatorily required to file a CbCR (because it meets the criteria referred to above), which has its registered office or management in Poland or does business in Poland via a foreign permanent establishment, must file a report to the Head of KAS whereby it will inform this authority that:
- it is a parent company, a designated entity or another type of entity filing a report on a group of companies, or
- a reporting entity was designated, and explain in which country or territory the report on the corporate group will be filed.
Therefore, each enterprise doing business in Poland, which is part of an international corporate group whose consolidated revenues in 2016 exceeded EUR 750 million, must notify the Head of KAS which entity will file a CbC report and in which country.
Deadline and form of notice
A CbC notice must be filed by no later than the last day of the fiscal accounting year of the given corporate group. The year 2016 is an exception in that according to interim regulations a notice concerning this year ought to be filed within 10 months of the last day of the fiscal accounting year. This means that a notice designating a group member filing the CbC report for 2016 must be submitted by the end of October 2017, whereas the 2017 notice must be filed by the end of December 2017 (naturally, assuming that the group's fiscal year fully overlaps with a calendar year). The Head of KAS may impose a fine of up to PLN 1 million on a taxpayer defaulting on the reporting obligation.
How to file a notice?
A link to the official CBC-P form (to be filed via the 'e-Deklaracje' system), as well as a description of the CBC-P form on the Ministry of Finance's website. The notice may be prepared and filed electronically in the form of an XML file (by means of the 'e-Deklaracje' system) or in hard copy to the address of the Ministry of Finance.
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.