Real estate companies are required by law to report their shareholding structures within three months of the end of the tax year, with shareholders of such companies bearing a similar responsibility. This means that the statutory deadline for companies whose tax year aligns with the calendar year expires on 31 March 2025. As such, you might be interested in a brief overview of these obligations.
Defining a Real Estate Company
The Polish CIT Act defines real estate companies as those meeting the following criteria:
- at least 50% of the balance sheet value of their assets is linked (directly or indirectly) to real estate located in Poland;
- the balance sheet value of such real estate exceeds PLN 10 million; and
- over 60% of their revenue comes from real estate, real estate rights, and shares in other real estate companies.
New companies are assessed based on market value rather than balance sheet value.
Key Information to Report
Real estate companies must disclose their shareholding structures. According to a general tax ruling issued by the Ministry of Finance, only entities holding (directly or indirectly) at least 5% of shares or rights in a real estate company should be reported. Crucially, the reporting obligations also extend to shareholders insofar as they hold (directly or indirectly) at least 5% of shares or rights in a real estate company.
Real Estate Reporting – Diagram
Devil is in the Details
The Ministry of Finance has issued a general tax ruling to clarify the extent of real estate companies' reporting obligations, confirming that they apply to both Polish residents and non-residents.
Furthermore, the Ministry noted that the reporting obligations extend to the following types of indirect shareholders:
- direct shareholders of a Polish real estate company's shareholders (so-called 'grandparent' companies);
- upper-level shareholders (above the level of a 'grandparent' company) holding shares in a real estate company or being direct shareholders of a real estate company through tax-transparent entities.
How Can We Help?
Even with the general tax ruling, the relevant provisions still give rise to many doubts, especially when it comes to reporting the shareholding structure of a capital group. Deciding how much information to disclose should be carefully considered on a case-by-case basis to balance the risks involved.
We have a proven track record of assisting some of the largest real estate companies on the Polish market in successfully navigating the complex maze of Polish tax regulations, and we can do the same for you.
In particular, we can:
- assess whether your company meets the legal definition of a real estate company;
- share our recommendations on the required level of detail when reporting the structure of a capital group;
- propose tailored solutions aimed at balancing the risks involved in making such disclosures;
- prepare real estate reports;
- assist you in discharging the reporting obligations.
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.
