The tax authorities’ approach to reporting indirect ownership of real estate is changing again

By 31 March 2026, companies owning real estate (and their partners) whose financial year aligns with the calendar year must submit ownership structure information to the tax office. As the reporting deadline approaches, it is worth revisiting the rules for qualifying entities as real estate companies. In practice, one of the most problematic areas remains the method for determining indirect ownership of real estate and the verification methods for meeting the asset structure condition outlined in Article 4a.35 of the Polish Corporate Income Tax Act. 

Importantly, the tax authorities’ approach in this area has evolved over recent years, and the latest tax rulings from 2025 and 2026 could significantly affect the results of ongoing calculations. 

Initial approach of the tax authorities – share value as a reference point 

In the early stages after introducing the regulations concerning real estate companies, the tax authorities held the view that when calculating the balance sheet value of indirectly owned real estate, the balance sheet value of shares in subsidiary capital companies and shares in partnerships should be included, provided that at least 50% of the balance sheet value of these entities’ assets consisted (directly or indirectly) of real estate located in Poland or rights to such real estate. 

In practice, this meant that, for verifying the asset structure of the parent company, the reference point was the balance sheet value of the shares, rather than the level of assets (real estate) owned by the subsidiaries. 

First change in the line of interpretation – “look-through” on real estate of subsidiaries 

The next stage in the evolution of the tax authorities’ position came through tax rulings, where the tax authorities started to assert that, in calculating indirect ownership of real estate, the balance sheet value of properties owned by subsidiaries should be considered directly, rather than the value of shares, capital shares, or equity interests in those entities. 

This approach was presented, among other things, in tax ruling no. 0111-KDIB2-1.4010.180.2024.2.AR. In these rulings, the tax authorities also began to specify a formula for verifying compliance with the condition that at least 50% of the balance sheet value of assets – directly or indirectly – should be the balance sheet value of real estate located in Poland or rights to such real estate. 

The formula was described as follows: 

Numerator: 
The balance sheet value of real estate in the given company, plus the balance sheet value of real estate constituting indirect assets (the balance sheet value of real estates owned by individual subsidiaries multiplied by the parent company’s percentage share in those subsidiaries), 
 

Denominator: 
The balance sheet value of the parent company’s direct assets plus the balance sheet value of indirect assets. 

This “transparent” approach allowed for a more comprehensive assessment of the companies’ connection to the real estate market. 

Latest interpretations from 2025–2026 – another shift in the tax authorities’ approach 

However, the latest tax rulings from 2025 and 2026 indicate another change in the tax authorities’ approach. According to the tax authorities, when determining the percentage coefficient referred to in Article 4a.35.b) of the Polish CIT Act, the value of assets (the “denominator”) should solely be based on the balance sheet value of assets presented in the company’s accounting records, without adding the balance sheet value of subsidiary entities or excluding the value of shares in subsidiaries held by the company. The balance sheet value of all assets of the entity thus only includes the assets owned by the company (and listed in its balance sheet), excluding the assets of subsidiaries listed in their balance sheets. 

This stance was presented, among other things, in individual tax rulings issued on 6 May 2025 (case no. 0111-KDIB1-1.4010.70.2025.1.AW) and 8 January 2026 (case no. 0111-KDWB.4010.177.2025.2.BB). 

Consequently, according to the current approach of the tax authorities, the formula for verifying the asset structure should be as follows: 

Numerator: 
The balance sheet value of real estate in the given company, plus the balance sheet value of real estate constituting indirect assets (the balance sheet value of real estate owned by individual subsidiaries multiplied by the parent company’s percentage share in subsidiaries), 
Denominator: 
The balance sheet value of the parent company’s direct assets. 

Practical conclusions 

The changes in the tax authorities’ approach show how important it is to continuously monitor the interpretative line and verify the methodology used to calculate the status of a real estate company, especially with the upcoming reporting obligations. Differences in the way the denominator is calculated can, in practice, determine whether a given entity meets the statutory definition of a real estate company, and thus is subject to special tax and reporting obligations.