Transfer Pricing: Country-by-Country Reporting
Ordinance of the Minister of Economic Development and Finance on the detailed scope of data to be included in the information about a group of entities
Tax Alert 7/2017 | 6 July 2017
On 21 June 2017 the Ordinance of the Minister of Economic Development and Finance of 13 June 2017 on the detailed scope of data to be included in the information about a group of entities was published in the Journal of Laws. The Ordinance implements the Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC.
Scope of the new Ordinance
This is an implementing ordinance to the Act of 9 March 2017 on the exchange of tax information with other countries, concerning the Country-by-Country Reporting (hereinafter: CbCR). The Act imposes reporting obligations on Polish entities that are members of large capital groups. The Ordinance regulates matters related to CbCR — providing information about a group of entities.
Elements required according to the Ordinance:
The Ordinance indicates what information should be included in the information about a group of entities. It is as follows:
- the aim of submitting the information about the group of entities (submission, update, adjustment);
- indication of the period covered by the information about the group of entities;
- name of the group of entities;
- indication of the currency in which the values included in the information about the group of entities are expressed;
- name of the reporting entity, with an indication of whether it is the parent entity, entity appointed to report or other entity;
- unique identification data of the members of the group of entities (such as: name of the member of the group, tax identification number, address, tax residence);
- indication of the business activities undertaken by the entities in the group, divided into: research and development; possession or management of intangible assets; purchases or orders; production or processing; sales, marketing or distribution; administrative, management or support services; provision of services to independent entities; intra-group financing; regulated financial services; insurance; ownership of shares or other proprietary rights in entities; dormant or other activities (need to be specified);
- data about members of the group of entities — generated revenues, profit (loss before taxation), income tax paid, income tax due, share capital, undistributed profit from previous years, number of employees, current and non-current assets — divided by the country or territory;
- additional information or explanations concerning the sources of data used to provide the information about the group of entities, exchange rates applied, information about activities (if it does not fall within the scope of point 7), notification regarding non-submission of data by the parent entity and other information, useful for interpreting data about the group of entities.
In addition, the Annex to the Ordinance contains detailed instructions on how to complete the CbCR, in particular clarifying the concepts of tax jurisdiction, information about the group of entities, sources of data used for the CbCR, the method of calculation of the number of employees or the type of economic activity.