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Transfer pricing is one of the most significant aspects of international tax law. The regulations on taxation of associated enterprises are present in the Polish tax legislation, which has been amended for the last 10 years. The amendments have resulted in additional financial and administrative burdens for taxpayers.
The amendments have brought more frequent tax inspections of transactions among associated enterprises. It is very important to know the transfer pricing rules, including the transfer pricing documentation requirements. To help you deal with the challenges of proper application of the regulations we invite you to use the knowledge of Rödl & Partner's tax law experts, who ensure effective transfer pricing advice.
The Ministry of Finance Transfer Pricing and Valuation Department published at the beginning of December 2021 the final version of transfer pricing explanatory notes no. 4 concerning the transactional net margin method.
Taxpayers obliged to prepare the Local File and whose financial year corresponds to the calendar year have time until 31 December 2021 to file the transfer pricing report (TPR form) and the statement on preparing TP documentation.
For several months now, business representatives and tax advisers have kept a watchful eye over machinations of the Polish lawmakers.
Amended Corporate Income Tax Act (CIT Act) entered into force on 1 January 2019 bringing a number of changes to transfer pricing laws.
Rödl & Partner experts took part in consultations conducted by the Ministry of Finance (MF) concerning new transfer pricing obligations.
Further modifications to Polish transfer pricing regulations were introduced on 1 January 2019. The regulations were adjusted to the OECD guidelines.
Chapter 1a of the Corporate Income Tax Act of 15 February 1992 provisions on transfer pricing, does not apply to the voluntary cancellation of shares in a limited liability company with no compensation.
It is no longer surprising that taxpayers can expect changes to transfer pricing laws at the start of every year. This year is no different – another set of amendments entered into force on 1 January.
The COVID-19 pandemic has affected the financial position of many enterprises. This has often necessitated an adjustment to the accounts of intra-group transactions.
Further modifications to transfer pricing regulations were introduced on 1 January 2019.
Globalisation in tandem with digitalisation is changing the contemporary business world. For many companies this means incorporating digital technologies into their overall business processes.
The Public Finance Committee passed a parliamentary amendment to the draft act amending the Excise Duty Act and some other acts at its yesterday’s session.
Please be reminded that the Corporate Income Tax Act contains detailed rules for the admissibility of transfer pricing adjustments (TP adjustment) from 1 January 2019.
The OECD published Guidance on the transfer pricing implications of the pandemic in December 2020.
Taxpayers with a tax year corresponding to the calendar year should file their first transfer pricing information return (i.e. TPR return) by the end of December 2020.
The Polish Sejm adopted the bill amending the Personal Income Tax Act, the Corporate Income Tax Act, the Act on Flat Income Tax on Certain Income earned by Natural Persons and Some Other Acts.
Most of the entities obliged to prepare the Local File had to submit the information on transfer pricing (TPR form) and the statement on transfer pricing documentation by 31 December 2020.
As the regulations on reportable tax arrangements were amended again, effective 1 July 2020, the previously assigned reportable cross-border arrangement numbers (NSP) had been invalidated.
Despite the worldwide pandemic tax authorities are not standing still and continue their inspections and launch new ones.
The Polish Tax Act was amended with effect from 1 July 2020 to include provisions enabling taxpayers to sign a cooperative compliance agreement.
Adjustments made during the tax year to prices of goods involved in transactions between associated enterprises are not subject to the principles of Article 11e of the CIT Act.
The Head of the National Revenue Information Service confirmed that whenever the criterion of no tax loss in a tax year is tested, this refers to a loss from a specific source of income which includes taxable transactions with a Polish associated enterprise.
Pursuant to the regulations in force since 2019, transfer pricing analysis is an obligatory element of each transfer pricing documentation, except for transactions made under the safe harbour regime.
The Transfer Pricing Forum (TPF) published on 3 March 2020 its recommendations on the interpretation and application of provisions on restructuring among associated enterprises.
The OECD released Transfer Pricing Guidance on Financial Transactions on 11 February 2020. The report includes many guidelines which may be helpful.
The Head of the National Tax Information Service confirmed in the advance tax ruling that neither downward, nor upward adjustment was subject to VAT.
The Polish President signed the Act on Resolving Double-Taxation Disputes and Concluding Advanced Pricing Agreements (DMR Act) on 5 November 2019.
The Polish Corporate Income Tax Act (“CIT Act”) and the Polish Personal Income Tax Act (“PIT Act”) were amended on 1 January 2019.
Transactions with associated enterprises must be made at arm’s length, that is, on terms which independent enterprises would agree.
One of the key changes introduced to the transfer pricing regulations with effect from 1 January 2019 is that tax authorities will now have new tools to challenge payments between associated enterprises.
The obligation to report transfer prices in electronic form (TP-R) came into force on 1 January 2019.
The President of Poland signed an Act on exchange of tax information with other countries on 20 March 2017.
We are writing to remind you that if your reporting financial year corresponds to the calendar year you have to notify the authorities whether you are obliged to prepare a CbC report for 2018.
On 14 November 2018, the Polish President signed the statute amending the Personal Income Tax Act (the PIT Act), the Corporate Income Tax Act (the CIT Act), the Tax Act and some other acts.
Transfer pricing is one of the most frequently inspected areas in enterprises that belong to international groups.
The recent amendments to the transfer pricing laws have prompted numerous interpretation doubts and difficulties in fulfilling documentation obligations.
Taxpayers whose revenues or costs as per the Polish accounting laws exceeded the equivalent of EUR 20 million in the year preceding the tax year must prepare the so-called Master File.
The Ministry of Finance has recently published two regulations on its website, which introduce new templates of PIT-TP and CIT-TP simplified information returns.
Taxpayers often wonder what information to include in the transfer pricing documentation so that tax authorities accept it as reliable evidence.
Tax-consolidated groups (TCG) were often used as an aggressive tax optimisation tool. The lawmakers have recently taken measures aimed at limiting such optimisation mechanisms.
On 3 April 2018, the Minister of Finance published general advance tax ruling no. DCT.8201.6.2018 dated 28 March 2018 concerning the obligation to update transfer pricing documentation.
The obligation of companies operating through their foreign permanent establishments to prepare transfer pricing documentation follows directly from the relevant provisions of the CIT Act.
In connection with the extension of deadlines for meeting transfer pricing (TP) documentation obligations, on 16 March 2018 the Ministry of Finance published practical explanations.
If your sales exceed EUR 100,000, you must prepare a transfer pricing documentation of all transactions concluded in a tax year with the given associated enterprise.
Definition of low-value added services was added to the transfer pricing provisions on 18 July 2013. This amendment is important for Polish taxpayers operating as part of corporate groups.
The Ministry of Finance has taken measures to make the deadlines for meeting transfer pricing (TP) documentation obligations more realistic and to simplify regulations in this scope.
The Ministry of Finance has issued a general tax ruling on transfer pricing. It touches upon the most disputable laws regulating this issue.
We would like to remind you of the new obligation to file a summary report (CIT/TP) for the tax year commencing after 31 December 2016, which should be attached to the annual tax return.
Dominika Tyczka-Szyda
Tax adviser (Poland)
Partner
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