Country-by-Country Reporting (CbCR) has become a crucial tool in promoting transparency and combating base erosion and profit shifting (BEPS) globally. This article provides an in-depth exploration of how CbCR is implemented and presented in Poland. We will delve into the regulatory framework, reporting requirements, and the impact on multinational enterprises (MNEs) operating within the Polish jurisdiction.

Introduction

CbCR was introduced by the Organization for Economic Cooperation and Development (OECD) as part of Action 13 of the BEPS project. Poland, aligning itself with international efforts to enhance tax transparency, has incorporated CbCR into its domestic legislation.

Regulatory Framework

In Poland, the legal foundation for CbCR is established in the Corporate Income Tax Act. The regulations require multinational groups with consolidated revenue exceeding a specified threshold to file a CbC report annually.

The Polish legislation follows the OECD guidelines closely, ensuring consistency in the information reported by MNEs operating in Poland and their global counterparts. The Polish Tax Administration (PTA) is responsible for enforcing these regulations.

Reporting Requirements

CbCR in Poland mandates that a designated entity within the MNE group, typically the ultimate parent entity, files a CbC report. The report should include information on revenues, profits, taxes paid, tangible assets, employees, and other relevant economic activities in each tax jurisdiction where the group operates.

The reporting threshold in Poland aligns with the OECD standard, currently set at consolidated group revenue equal to or exceeding €750 million in the preceding fiscal year. MNEs meeting this criterion must submit the CbC report within 12 months from the end of their fiscal year.

Impact on Multinational Enterprises

The implementation of CbCR in Poland has significant implications for MNEs operating within the country. Beyond the administrative burden of compiling and submitting the required information, there are strategic considerations for tax planning and risk management.

CbCR enables tax authorities to assess the global allocation of income, taxes paid, and other indicators of economic activity within the MNE group. This, in turn, helps tax authorities identify potential areas of tax avoidance and implement necessary measures to ensure compliance.

Furthermore, CbCR fosters transparency and cooperation among tax authorities globally, aligning with Poland’s commitment to international tax standards. The exchange of CbC reports between tax jurisdictions enhances the effectiveness of global efforts to combat tax evasion and aggressive tax planning.

Challenges and Future Developments

While CbCR brings numerous benefits, challenges persist, including data privacy concerns, potential disclosure of commercially sensitive information, and the need for consistent global implementation.

Looking ahead, Poland may refine its CbCR regulations to address emerging challenges and align with evolving international standards. Continuous collaboration with other jurisdictions and monitoring OECD updates will be essential to ensure the effectiveness of CbCR in achieving its intended objectives.

The implementation of CbCR in Poland reflects the country’s commitment to international efforts aimed at enhancing tax transparency and combating BEPS. By closely adhering to OECD guidelines, Poland has established a robust regulatory framework that places it at the forefront of global initiatives to address tax avoidance and promote a fair and transparent international tax system.