Country-by-Country 2020 reporting

Country-by-Country reporting is used to assess transfer pricing risks and is intended to limit tax abuses leading inter alia to profit transfer to tax havens. In Poland, this requirement was introduced in 2017.

The obligation to submit Country-by-Country reports applies to entities being part of capital groups whose consolidated revenues in the financial year were greater than:

• PLN 3 250 million - for groups preparing consolidated financial statements in Polish zloty,
• EUR 750 million - for capital groups whose dominant entity has its registered office or management board within the territory of Poland, but whose consolidated financial statements are prepared in a currency other than PLN.

The Country-by-Country report should be submitted in the country of the dominant entity, however, it is possible to appoint an entity from another country to submit the CbC-R report in a capital group, and then the reporting obligation is fulfilled in the place of its registered office.

CbC-P notification

Entities from capital groups subject to Country-by-Country reporting, which have their registered office or management on the territory of Poland or operate through a foreign permanent establishment, are required to submit a CbC-P notification to the Head of the National Tax Administration.

• CbC-P - information as to which entity and in which country a Country-by-Country report will be submitted for a given capital group

The CbC-P notification must be submitted within 3 months from the end of the financial year.

CbC-P notifications do not have to be submitted by entities consolidated under the equity method.

CbC-R – what is the deadline?

Country-by-Country reporting requires capital groups to inform the tax authorities about, inter alia:

• the scope of their activities, including the volume of assets, the total share capital and the employment figures,
• the profits or losses generated, the tax paid and/or payable and the revenue generated,
• information on the group of entities, including the place of business activity and the subject matter thereof.

The CbC report shall include all entities of the group, including those that would be included in the consolidated financial statements of the group if their shares were traded on a regulated market (deemed listed provision).

CbC-R is submitted only by the dominant entity or another designated entity of the group and is delivered to the tax authorities of the countries in which the group has tax residency status valid on the last day of the reporting financial year. The list of countries with which Poland has acceded to exchange reports is updated once a year.

Entities submitting a Country-by-Country report are required to do so within 12 months following the end of the financial year.

Country-by-country reporting - sanctions

Failure to comply with CbC reporting obligations is punishable by a fine of up to PLN 1 million. The sanctions are imposed for:

• Failure to submit a CbC-P notification
• Failure to submit a CbC-R report
• Reporting of incomplete or incorrect data - applies to both CbC-P and CbC-R

How can we help?

We offer full support in the preparation and submission of all required documents to entities covered by Country-by-Country reporting obligation.