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Public disclosure of income tax reports – amended Accounting Act

by Paulina Janka

16 May 2024

The Polish President signed the Act amending the Accounting Act and certain other acts on 6 April 2024. The amended statute implements Directive 2021/2101 to introduce the obligation to publicly disclose reports on income tax broken down by countries.

Purpose of the amended legislation

At present, parent companies which have their registered office or management in Poland and which belong to a group whose consolidated revenues following from the financial statements exceeded 750 million euro (3.25 billion zloty) in the previous year must fill out and submit a CBC-R form. Such CBC-R reports containing information about the corporate group are filed with the Head of the National Revenue Administration.

The amended Accounting Act additionally introduces the obligation to disclose the income tax country-by-country reports publicly. The object of the income tax report is to boost public control of corporate income tax paid by multinational enterprises operating within the EU to further support corporate transparency and business responsibility.

Who is covered by the new obligation?

The law makes the public disclosure of income tax reports mandatory for:

ultimate parent entities and standalone entities if their revenues disclosed in the annual financial statements exceeded 3.5 billion euro in each of the two recent financial years;
entities from outside the European Economic Area (EEA)¹ which operate in Poland through a branch office or a subsidiary if their revenues exceeded 750 million euro in each of the two recent financial years.

As regards the corporate groups that operate exclusively through subsidiaries or branch offices, those subsidiaries and branch offices should publish and make available the report of the ultimate parent entity. If such information or that report is not available or the ultimate parent entity does not provide the required information, the subsidiaries and branch offices should compile, publish and make available the report on income tax containing all details available to them, obtained or acquired, plus a statement saying that their ultimate parent entity has not provided the required information.

EXAMPLE 1

Company X Sp. z o.o. of Poland belongs to a corporate group. Company X is the ultimate parent entity. Over the last two financial years, i.e. 2023 and 2024, the company has earned revenues of 4 billion zloty(exceeded the 3.5 billion zloty threshold). The company is obliged to compile, publish and make available the income tax report.

EXAMPLE 2

Company Y Sp. z o.o. with its registered office in the EEA belongs to a corporate group. Company Y being a foreign enterprise establishes a branch office in Poland. Over the last two financial years, i.e. 2023 and 2024, the revenues disclosed in the parent entity’s consolidated financial statements have amounted to 800 million euro(exceeded the 750 million euro threshold). The income tax report has to be made available and published. The branch office has asked the parent entity for the income tax report.

EXAMPLE 3

Company X Sp. z o.o. of Poland belongs to a corporate group. Company X is a subsidiary controlled by the ultimate parent entity established outside the EEA. Over the last two financial years, i.e. 2023 and 2024, the revenues disclosed in the parent entity’s consolidated financial statements have amounted to 800 million euro (exceeded the 750 million euro threshold). Company X Sp. z o.o. is obliged to publish and make available the income tax report. The parent entity has not provided the report to be published by Company X sp. z o.o. Company X sp. z o.o. is obliged to compile a “substitute” report containing information which it has at hand or has obtained or acquired from the parent entity.

Responsibilities

The new statutory obligation is to:

compile the income tax report;
file the income tax reports within 12 months of the balance sheet date with the competent court registry (to be done by entity managers);
publish the report on websites for at least 5 years.

Auditors’ check

Statutory auditors and audit firms will have to confirm in their auditor’s report whether the entity is obliged to file an income tax report and if so – whether it has filed it. Non-compliance is subject to a fine.

When will the new obligation come into force?

The new legislation will apply for the first time to income tax reports for the financial year commencing after 21 June 2024. In practice, this means that the obligation will first apply to entities that have non-standard financial year commencing in or after July 2024.

Challenges and obligations

The new rules will apply not only to the ultimate parent entities but also their branch offices and subsidiaries. The statute implements the EU Directive, which means that similar obligations will apply across all Member States. That is why it is so important to examine the implications for your business in advance.

Not sure if the new regulations apply to your business? Do you want to know who can be exempt? Contact us – we will have a first look if you may need to comply with the new obligations and support you in all formalities.

¹ The European Economic Area (EEC) encompasses the European Union Member States plus Iceland, Norway and Liechtenstein.

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Paulina Janka

Tax adviser (Poland)

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