On March 9, 2017, the Polish Sejm gave final approval of the law on the exchange of tax information with other countries (the “Law”) following consideration of Senate amendments. The Law provides information on obligations of financial institutions (FIs) and the automatic exchange of country-by-country (CbC) reports. The Law does not apply to the exchange of tax information between Poland and the U.S. with respect to the Foreign Account Tax Compliance Act (FATCA).
With respect to the automatic exchange of CbC reports, the Law says that it applies to a group of entities whose consolidated revenues in the previous year exceeded €750 million. See BEPS Action 13. Information on the group can be used to analyze the risk of understatement of income tax and other statistics. The Polish parent company will provide the tax administration with information on the group within 12 months of the end of the reporting year.
A group entity, not the parent company, which has a registered office or permanent establishment (PE) in Poland shall provide the group information for the reporting year where one of the following applies:
- The parent company has no obligation to provide a CbC report for the reporting year in the country or territory where it is established or managed.
- The parent company’s country or territory has not concluded a qualifying competent authority agreement with Poland to exchange tax information within 12 months of the end of the reporting year.
- The parent company’s country or territory suspended automatic exchange of information for reasons other than those permitted under the provisions of a qualifying agreement between the competent authorities or otherwise failed to automatically transfer information on the group entities that have a registered office, are managed in Poland or have a Polish PE.
This group entity shall notify the tax administration that it is the parent-designated entity or other entity no later than the last day of the reporting year of the group.
Group information includes the following:
- Realized gain (loss) before tax.
- Income tax paid.
- Income tax payable.
- Retained earnings from prior years.
- Number of employees.
- Tangible assets (fixed and current) other than cash and cash equivalents.