Transfer Pricing: Two weeks left to submit CbC notification in Poland
Tax alert 12/2017 | 18 October 2017
Starting from 2016, the biggest capital groups are obliged to submit the Country-by-Country Report (hereinafter: CbC Report).We would like to draw your attention to the fact that there are just two weeks left to submit Country-by-Country notification in Poland.
According to the Act of 9 March 2017 on the exchange of tax information with other countries (hereinafter: the Act on the exchange of tax information) starting from 2016 Polish entities which belong to the biggest international groups are obliged to submit a notification in which they inform the Head of the National Tax Administration that:
- they are the parent unit (unit appointed to submit the CbC Report or another unit submitting the CbC Report) or
- they indicate the unit submitting the CbC Report, specifying the country or territory where the CbC Report will be submitted.
Who should submit the CbC notification?
CbC notification should be submitted by all entities (both parent unit and subsidiary) that are members of large capital group for which the consolidated financial statement is prepared and whose consolidated revenues exceeded in the previous tax year an equivalent of EUR 750 million.
When the CbC notification should be submitted?
Reporting financial year 2016*
With regard to the reporting financial year starting after 31 December 2015, however not later than before 1 January 2017 – the notification should take place within 10 months from the end of this reporting financial year (i.e. in the case where the reporting financial year coincides with the calendar year, the CbC notification for 2016 should be submitted by the end of October 2017).
Reporting financial year 2017*
With regard to the reporting financial year starting after 31 December 2016, the notification should take place on the last day of the reporting financial year of a given group at the latest (i.e. in the case where the reporting financial year coincides with the calendar year, the CbC notification for 2017 should be submitted by the end of December 2017).
How to submit a CbC notification?
On October 9, 2017 the model electronic CBC-P document (in xsd file) together with the description of the elements of a CBC-P document was published by Polish Ministry of Finance in The Central Repository of Model Electronic Documents ePUAP (https://epuap.gov.pl/wps/portal/strefa-urzednika/inne-systemy/crwde - model number 2017/10/09/4487). This CBC-P document can be submitted through the e-Deklaracje website starting from October 19, 2017.
According to the Announcement of the Polish Ministry of Finance there is ongoing work on preparation of interactive form of CBC-P (to be downloaded and completed in PDF file).
A notification submitted by means of electronic communication (both via e-Deklaracje, as well as using the interactive form) should be signed by a taxpayer with a qualified electronic signature.
CbC notification can be also submitted in the paper form at the address below:
Departament Poboru Podatków
ul. Świętokrzyska 12
What is the sanction for the failure to fulfill the CbC notification obligation?
The unit which belongs to a capital group is punishable by a pecuniary penalty if it failed to provide the CbC notification.
The pecuniary penalty is imposed by the Head of the National Tax Administration by way of decision, in an amount not higher than PLN 1 million (the amount will depend on the type and scope of breach, to-date operations of the unit and its financial possibilities).
We recommend that Companies which are part of a big capital group:
- identify whether the capital group to which the given entity belongs is subject to the obligation to prepare the CbC Report;
- get in touch with the group in order to identify the unit responsible for preparing and submitting the CbC Report for reporting financial year 2016 and 2017;
- check and keep the term to notify the Head of the National Tax Administration which company is the reporting unit and specify the jurisdiction in which the CbC Report will be submitted.
* We would like to emphasize that the reporting financial year is defined as the financial year for which the annual consolidated financial statement is made, regarding which the CbC Report is submitted.