The Regulation of the Minister of Finance of the day entered into force 14 March 2018 amending the Regulation on the detailed scope of the data to be provided in the information on the group of entities and how it is to be filled in (hereinafter: Amending Regulation).
What exactly does this mean for entities in a group of entities?
It is worth mentioning, first, that the provisions on the reporting of Contra-by-Country are contained in the Act dated 9 March 2017 on the exchange of tax information with other countries (hereinafter: Act). The Act introduced, inter alia, an obligation for entities which are part of a group of entities (i.e.
a group that has to meet certain conditions, inter alia, its consolidated income must exceed the threshold in the previous financial year. 750,000,000 EUR) information on the group of entities for the reporting financial year 1 .
Regulation of the Minister for Development and Finance of 13 June 2017 on the detailed scope of the data in the information on the group of entities and the manner in which it is to be completed, has determined the exact extent of the information to be included in that information.
So what does the amending Regulation amend?
According to its records in the case of a foreign establishment, the data referred to in section 1 point 8 points (e) and (f) (i.e. the sum of core (undertaking) capital and the undistributed profit from previous years at the end of the reporting financial year) shall be reported by the entity to which the undertaking belongs. In the previous version, the entity to which the undertaking belongs only held core capital.
In accordance with the Communication from the Minister of Finance, the amending Regulation aims to “ensure that the treatment of undistributed profits of undertakings complies with the provisions laid down in Directive 2011/16 of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799 (Official Journal of the European Union L, No.
64 to 11 March 2011, p. 1, as amended), which have been introduced Directive 2016/881 of 25 May 2016 amending Directive 2011/16 on mandatory automatic exchange of information in the field of taxation (Official Journal of the European Union L, No. 146 to 3 June 2016, p. 8).”
The full content of the communication and the content of the amending Regulation can be found at the following address:
https://www.finanse.mf.gov.pl/cit/ceny-transferowe1/wyjasnienia-i-komunikaty1/-/asset_publisher/Id8O/content/zmienione-rozporzadzenie-w-sprawie-cbc?redirect=https%3A%2F%2Fwww.finanse.mf.gov.pl%2Fcit%2Fceny-transferowe1%2Fwyjasnienia-i-komunikaty1%3Fp_p_id%3D101_INSTANCE_Id8O%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn-2%26p_p_col_count%3D1#p_p_id_101_INSTANCE_Id8O_
1 More about Country-by-Country reporting obligations can be read in one of the previous articles by Russell Bedford at:
https://www.russellbedford.pl/en/home/news/item/1572-dlaczego-warto-zwr%C3%B3ci%C4%87-uwag%C4%99-na-countru-by-country-reporting?.html
Author:
Michał Zdanowski
Tax consultant in Russell Bedford Poland.
Graduate of the Faculty of Law and Administration at the University of Warsaw, Graduate of the Postgraduate Tax and Tax Law Studies at the University of Warsaw. During his studies he gained experience in law and tax law firms. Since September 2011 He is associated with Russell Bedford Poland. It specialises in documenting transactions between related parties.