Public tax reporting – new CBC requirements

This article answers the following questions:

• What is a public CBC report?
• Will the public CBC report replace CBC-P and CBC-R?
• What are the deadlines for publishing the public CBC report?

Reporting obligations for international capital groups are regularly subject to change. The implementation in Poland of EU Directive 2021/2101 imposes an obligation on large multinational enterprises to publicly disclose an income tax report (hereinafter referred to as the “Report”). What changes have come into force, who will they apply to, and how should businesses prepare?

CBC reporting

Let us recall that CBC reporting is an obligation introduced by the Organisation for Economic Co-operation and Development (OECD). It requires large capital groups – specifically their parent companies – to disclose financial data such as revenues, profits, taxes paid, and operational activities in various jurisdictions.

The purpose of CBC reporting is to increase the transparency of tax systems and combat tax avoidance.

Subsidiaries of capital groups subject to CBC reporting are also required to submit a CBC-P notification.

Who is covered and what obligations do the new public CBC reporting rules impose?

The new public tax reporting rules do not change the existing obligations – they still apply to groups with revenues exceeding EUR 750 million (which must submit a CBC-R report to the Head of the National Revenue Administration within 12 months of the end of the financial year) and their subsidiaries (which must also submit CBC-P notifications to the Head of the National Revenue Administration within 3 months of the end of the financial year).

The implementation of EU Directive 2021/2101 introduces:

1. An obligation to prepare, publish and make available an income tax report by:
   1. ultimate parent entities – if their revenues, as stated in the annual consolidated financial statements, exceed PLN 3.5 billion for two consecutive financial years,
   2. standalone entities (not part of a capital group) with their registered office in Poland – if their revenues, as stated in the annual financial statements, exceed PLN 3.5 billion for two consecutive financial years.

In both cases, there is an additional condition – at least one subsidiary (or branch) of such a capital group must have its registered office or fixed establishment outside Poland. 

Capital groups operating exclusively within Poland and without any foreign presence are exempt from the obligation to prepare, publish and make available the income tax report.

2. An obligation to publish and make available the income tax report by:
   1. Subsidiaries with a registered office in Poland, if:
      1. they do not qualify as micro or small enterprises under the Accounting Act,
      2. they are controlled by a parent entity with its registered office outside the European Economic Area (EEA) and its consolidated revenues exceed EUR 750 million for two consecutive financial years,
   2. Branches operating in Poland, if:
      1. the branch’s revenues exceed PLN 51 million for two consecutive financial years,
      2. the ultimate parent entity (standalone or within a group) has its registered office outside the EEA and its consolidated revenues exceed EUR 750 million for two consecutive financial years.

What do these regulatory changes mean in practice for Polish companies? The new public CBC reporting obligations may apply to: 

• Polish companies that are parent entities (with subsidiaries in Poland or abroad),
• Polish companies that are subsidiaries controlled by parent entities outside the EEA,
• Branches of foreign companies registered in Poland and controlled by parent entities outside the EEA.

Therefore, these new CBC requirements should be carefully reviewed by companies operating in Poland whose parent entities are located, for example, in the USA, Switzerland or the United Kingdom.

What must the public CBC report include?

The implementation of the EU Directive imposes an additional obligation on entities meeting the above conditions to prepare a public report that will be made available in the National Court Register (KRS) and on the companies’ websites.

The newly required report will be similar to the report submitted to the National Revenue Administration under CBC-R reporting. The public report should include:

• the name of the parent entity and the constituent entities of the group,
• a brief description of the activities of the entities within the group,
• the amount of profit or loss before tax,
• income tax due and paid,
• revenues,
• retained earnings from previous years,
• the tax year,
• the currency in which the report is prepared,
• a statement that the report has been prepared in accordance with the regulations. 

In which country should the public CBC report be published?

As a general rule, the public CBC report should be prepared and published on its website by the parent company.

Subsidiaries are also required to publish the income tax report prepared by the parent entity. This means that if the parent company – for example, based in Germany – prepares and publishes the report on its website, the Polish subsidiary is only obliged to publish that report. 

If several conditions are met by the parent entity, it is possible to completely exempt the subsidiary from the obligation to publish the income tax report. To achieve this, the parent entity must: 

• prepare the income tax report in accordance with the regulations,
• make this document available within the statutory deadline,
• indicate the name and registered office of the subsidiary within the EEA designated to submit the report to the relevant register.

An exception applies if the parent entity does not publish the report in the required commercial register and on its website – in such a case, the responsibility for preparing and publishing the income tax report rests with its subsidiaries. In this situation, the Polish subsidiary should contact the parent entity to obtain the missing information, prepare its own report and attach a statement that the parent entity has not provided such a report.

Therefore, if the parent company – for example, based in the USA – does not prepare and publish the required CBC report, the obligation will fall on the Polish subsidiary, which will then be required to prepare and publish such a report:

• on its website,
• in the National Court Register, along with a statement that the parent entity has failed to fulfil the above obligation.

Deadlines for publishing the public CBC report

The obligation to publicly disclose applies to financial years beginning after 22 June 2024. Companies have 12 months from the balance sheet date to publish the report. Thus, companies whose financial year coincides with the calendar year will be required to prepare the first public CBC report for the financial year starting in 2025, and its publication should take place no later than 31 December 2026.

The new regulations have been introduced to eliminate aggressive tax planning by large multinational enterprises and to further enhance tax transparency for international capital groups. Although the first deadline for publishing the new report falls in 2026, companies operating in Poland should already verify whether they will be subject to these requirements and – if so – prepare to collect the necessary information.

If you have any questions or doubts, our tax advisory experts remain at your disposal – we encourage you to contact us.