Starting from January 1, 2021, the CIT Act obliges real estate companies to appoint a fiscal representative. The aforementioned obligation applies to companies that do not have their registered office or management board in the territory of the Republic of Poland.
The necessity to appoint a fiscal representative is connected with the imposition on real estate companies of an obligation to collect and pay advance income tax on the sale of shares or participation units in real estate companies.
The duty of a fiscal representative is to perform the rights and obligations of the payer on behalf of and for the benefit of a real estate company. Moreover, the fiscal representative is jointly and severally liable with the real estate company for the tax liability that the fiscal representative shall pay on behalf of and for the benefit of the real estate company.
A fiscal representative may be a natural person, a legal person or an organizational unit without legal personality. The entity appointed as a fiscal representative should meet the following conditions:
- it has its registered office or management board or place of residence in the territory of the Republic of Poland;
- in the last 24 months it has not had any tax arrears constituting state budget income exceeding 3% of the amount of due tax liabilities in individual taxes;
- it has not been convicted of a fiscal offense for the last 24 months; in the case of tax representatives who are not natural persons, the said requirement of no criminal record applies to partners of a civil or commercial partnership without legal personality or members of management bodies, persons keeping accounting books;
- it is entitled to provide professional tax consultancy in accordance with the provisions on tax consultancy or to provide bookkeeping services in accordance with the provisions on accounting.
A fiscal representative is appointed under a written agreement specifying at least:
- the names of the parties to the agreement and their addresses and identification data for the purposes of settling income tax on the sale of shares or participation titles in a real estate company;
- a statement made by the entity that is appointed a fiscal representative that it meets the statutory conditions for a fiscal representative.
The CIT Act specifies only the minimum required content of the contract establishing a fiscal representative. In practice, such agreements should also specify other important issues, such as the remuneration of a fiscal representative, mutual disclosure obligations or liability for damages in the event of a breach by one of the provisions of the agreement or the CIT Act.
The obligation to appoint a fiscal representative does not apply to real estate companies that are subject to income tax in an EU Member State or in another EEA country on their entire income, regardless of where they are earned.
In the event of failure to comply with the obligation to appoint a fiscal representative, the real estate company is subject to a fine of up to PLN 1,000,000.