Recently, the Ministry of Finance published a draft amendment to the Accounting Act, implementing EU Directive 2021/2101. Its purpose is to introduce an obligation addressed to the largest entities to prepare and publish an income tax report.
This obligation applies to companies that are:
- an ultimate parent undertaking company (i.e. they prepare consolidated financial statements), if the income included in the annual consolidated financial statements of this entity exceed PLN 3.5 billion for each of the last two financial years, or
- a standalone undertaking (i.e. a member of a capital group), if the income included in the annual financial statements of this entity exceed PLN 3.5 billion for each of the last two financial years.
Note: this obligation will not apply to e.g. capital groups consisting entirely of Polish entities.
Under certain conditions, this obligation will also be imposed on subsidiaries and branches controlled by parent companies from outside the European Union.
A decrease in the value below these thresholds for the next two financial years will result in the elimination of the discussed obligation.
As part of this obligation, a special document will have to be prepared, published and made available, which should contain in particular:
- details of the ultimate parent undertaking company and a list of subsidiaries based in the European Economic Area or on the list of “tax havens” published by the EU (the so-called “black” and “grey” lists) and a brief description of the nature of their activities;
- fiscal year;
- presentation currency of the income tax statement;
- number of employees in full-time equivalents;
- net income (total), including transactions with related parties;
- the amount of profit or loss before tax;
- the amount of income tax due in a given financial year, current tax, excluding deferred tax and provisions for contingent tax liabilities;
- the amount of income tax paid in a given financial year in a given tax jurisdiction;
- the amount of undistributed profit from previous years at the end of a given financial year.
Note: the data is to be presented by individual EU countries where the business is conducted and by the indicated “tax havens”. For other jurisdictions, aggregated data is to be provided.
The model of the report is to be defined by the European Commission. The document will have to be signed with a qualified electronic signature, a trusted signature or a personal signature.
The deadline for fulfilling the obligation is 12 months after the end of a given financial year.
The report is to be submitted to the (Polish) National Court Register and published on the entity’s website (obligation to publish for at least 5 years).
The person responsible for the implementation of the obligation is the head of the entity. In the event of failure to prepare the report, its preparation contrary to the regulations or unreliable, or failure to publish it, criminal liability will be imposed (a fine or imprisonment of up to 2 years).
The first report is to be prepared for the financial year starting after 21 June 2024.