Surely, we all remember the last year’s “gift” - the unexpected additional statutory obligation for real estate companies to report payment deadlines in commercial transactions. That obligation is now gone; but is it gone for good?

Reports due by the end of January 2021

Let us remind those who may have forgotten: the CIT Act was amended to introduce a definition of a real estate company – e.g. point 3 on real estate companies was added to article 27b section 2 of the CIT Act. Coincidentally, a reference to article 27b section 2 of the CIT Act in the context of reporting was made in the Act on Counteracting Excessive Delays in Commercial Transactions (Act on Payment Backlogs). Thus, the amendment to the CIT Act made real estate companies subject to the payment backlog reporting obligation (it is anybody’s guess to what extent it had been intended to do so).

The applicable reports were due by 31 January 2021, which meant that a real estate company was given about a month to familiarize itself with the obligation in question, analyse the data, and present it in an appropriate form. What is more, the year 2021 was the first ever year during which such reports had to be filed, so the fact that finance departments lacked experience in this added some distinctive flavour. The wording of the Act on Payment Backlogs was clear that the obligation covered real estate companies from as early as 2020 onwards, which was further confirmed by statements made by employees of the Ministry of Development, Labour and Technologies.

...but are you sure?

In the second half of January, the Ministry made a show-off by giving a completely different interpretation, according to which real estate companies would have had to submit their first report on payment deadlines only for the year 2021, i.e. by the end of January 2022.

Since it was a hefty effort to process the data to be reported, our work had started as early as in November 2020 and we were almost in the home straight with some clients when the new interpretation was put out.

Or maybe let's take it to the next level

In December 2021, regulations on controlling crisis shield subsidies were amended. Why mention it? Because along with those regulations the Act on Payment Backlogs was also amended to the effect that real estate companies completely ceased to be subject to the obligation to report commercial transaction deadlines. Specifically, article 13a of that Act was amended and it now makes a reference to article 27b section 2 points 1 and 2 of the CIT Act (no longer to the entire section 2, which had also included point 3 applicable to real estate companies).

Interestingly, there is another Payment Backlog Bill in the pipeline, the content of which has not yet been made public. Thus, though it is difficult to foretell, the above reporting obligation for real estate companies might yet be restored.

Is the legislature level-headed?

Despite that real estate companies have got rid of the deadline reporting obligation, we cannot say for sure they will be able to rejoice. The legislative effort described above and the method of implementing consecutive amendments show that it is impossible to plan anything purposeful in the face of such massive legislative chaos.

In conclusion, we wish you to find under the Christmas tree and throughout the coming New Year lots of legislative peace and quiet.