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Resale price method – explanatory notes of the Ministry of Finance


by ​Paulina Gwiazdowicz

17 April 2023

In March 2023, the Ministry of Finance published its explanatory notes on the application of one of the five basic transfer pricing verification methods – the resale price method.

This method is primarily used in trade in goods between associated enterprises, one of which is a manufacturer and the other a distributor (or between associated distributors).

The explanations take into account the Transfer Pricing Forum Recommendation of 3 March 2020 regarding the description of the resale price method and the remarks reported as part of the tax consultations. Below please find the key issues and conclusions of these explanatory notes. 

General information


The Ministry of Finance's explanatory notes on the resale price method apply to controlled transactions carried out after 31 December 2018.


Explanatory notes issued by the Ministry of Finance are not a source of law and are not directly binding on tax authorities.


If taxpayers comply with the explanatory notes issued by the Ministry of Finance, they are protected under the no-harm rule laid down in the Tax Act.


The Ministry of Finance issues explanatory notes ex officio to standardise the application of the law by the tax authorities. In the case of the discussed explanatory notes, this concerns the uniform understanding and application of the resale price method within the framework of the transfer pricing analyses.

Scope of application of the method

The resale price method calculates the price of goods or services purchased from an associated enterprise by reducing the price of those goods or services sold to an independent enterprise by the resale price margin.

IE - independent enterprise
AE - associated enterprise

With the resale price margin the reselling entity should cover its direct and indirect costs associated with the resale of the object of the controlled transaction and make a profit appropriate to its functions, assets and risks. 

* The allocation keys shown are just examples and do not form an exhaustive list of potential allocation keys to be used in given circumstances.

In the resale price method, it is possible to use a wide range of financial ratios for the purpose of completing the TPR form. The indicator that can be considered optimal for the method in question is the gross margin ratio from resale. It applies irrespective of the income statement preparation method that the company applies, and is calculated according to the following formula:

Some of the most important aspects of the published explanatory notes include:

Noteworthy are the most common mistakes that occur when applying the resale price method, which may include:

  • disregarding the factors affecting the margin achieved, i.e.: assets employed, risks assumed, functions performed;
  • failure to prepare comparability adjustments eliminating differences affecting the margin;
  • comparing transactions that are carried out by entities with a different functional profile or that operate in different markets or geographical areas.

At Rödl & Partner, we offer comprehensive support in transfer pricing obligations. Please contact us for further information or support in preparing your TPR.


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