The Act of October 23, 2018 amending the Personal Income Tax Act, the Corporate Income Tax Act, the Tax Ordinance Act and certain other acts introduced a number of changes in transfer pricing as of January 1, 2019. The purpose of the introduced changes is to simplify the regulations, but also to reduce bureaucratic burdens for taxpayers, in particular by significantly increasing the documentation thresholds. Additionally, the changes supplemented the domestic regulations with further elements developed by the OECD in the field of transfer pricing. There is a separate chapter on transfer pricing in tax acts.
The new legal regulations standardized some concepts and introduced new definitions, i.e. controlled transaction, entities related to the controlled transaction. The changes themselves did not introduce new obligations for the taxpayer, but only harmonized and structured them with the OECD recommendations.
The most important change in the scope of transfer pricing documentation obligations is the raising of thresholds. The only criterion is the value of the transaction, determined separately for each controlled transaction of a homogeneous nature and for the cost and revenue side at the level:
Tax laws define in detail what should be understood as the value of a controlled transaction in relation to particular groups of transactions.
Additionally, the threshold for the preparation of group documentation has been raised. The entities obliged to prepare it are entities belonging to the capital group, whose consolidated revenues exceeded PLN 200 million or its equivalent.
Exemptions from the obligation to prepare local file documentation for controlled transactions have been introduced in the following cases:
Another important change is the introduction of a comparative analysis to each local file, or if such an analysis is not possible, a compliance analysis.
The deadlines for: preparation of local file documentation, submission of a declaration on the preparation of local tax documentation and information on transfer pricing (TP-R) up to 9 months after the end of the tax year have been extended. After changes in the regulations, group documentation may be prepared within 12 months after the end of the tax year.
Simplified solutions, the so-called safe harbors for loan transactions and low value-added services. After meeting the conditions set out in the tax laws in the field of controlled transactions, it will be possible to withdraw from some of the documentation obligations and the tax authorities will not be able to question the transaction price.
The possibility of making adjustments to transfer prices was introduced by changing the amount of revenues or costs incurred after meeting a number of conditions set out in tax laws.
The obligation to submit a simplified PIT / TP and CIT / TP report was replaced with a new form "information on transfer pricing" (TP-R), which is submitted in electronic form. The deadline for submitting the information falls on the same date by which the local documentation must be prepared and the declaration on the preparation of the documentation must be submitted.
Detailed information related to transfer pricing can be found in the following legal acts:
Ordinance of the Minister of Finance of December 21, 2018 on the method and procedure for eliminating double taxation in the event of the adjustment of profits of related entities in the field of corporate income tax.
Ordinance of the Minister of Finance of December 21, 2018 on the method and procedure for eliminating double taxation in the event of the adjustment of profits of related entities in the field of personal income tax.