Country-by-Country report (CBC-R) is a reporting mechanism set out in the Act of 9 March 2017 on the exchange of tax information with other countries. Entities belonging to large multinational groups are obliged to report tax information related to that capital group to the National Tax Administration.
In order to determine if there is an obligation to submit a CbC-P notification, it should be verified whether the consolidated revenues of the capital group in the financial statements for the previous financial year exceed the following thresholds:
- PLN 3,250,000,000 (if the capital group prepares consolidated financial statements in PLN) or
- EUR 750,000,000 or the equivalent amount.
Conversion of threshold figures for the purposes of CBC reporting is made in accordance with the guidelines set out in Article 82(2)(2) of the Act on the exchange of tax Information with other countries:
- if the parent company has its registered office or management board outside the territory of the Republic of Poland – the conversion is made according to the rules set out by the country or territory in which the parent company has its registered office or management board (if no conversion rules are set in that country, the exchange rate described below applies);
- if the parent company has its registered office or management board on the territory of the Republic of Poland – the conversion is made at the last exchange rate published by the European Central Bank on the last day of the fiscal year preceding the reporting financial year.
When the consolidated revenues of the group exceed the above thresholds, the group entities will be obliged to file a CbC-P or CbC-R.
The CbC-R report files the parent or any other designated entity in the group, while the other entities will file a CbC-P notification covering, among other things, the information on the reporting entity and the country or territory in which the CbC-R report will be filed.
The deadline for filing the CbC-P notification falls 3 months after the end of the group’s reporting financial year. If the group’s financial year equals the calendar year, the deadline for 2022 lapses on 31.03.2023.
In summary, in order to determine whether a group company will be required to file a CbC-P, it is necessary to know the consolidated revenues of the group. When these exceed the thresholds indicated above, it is necessary to determine which entity is the dominating one within the group, which entails its obligation to file a CbC-R report. All other entities will be obliged to file a CbC-P notification within three months following the closing of the group’s financial year.
CbC-P and CbC-R froms can be found at podatki.gov.pl.
Source: article prepared by our cooperation partner TaxAGroup
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