Marcin Jeliński

Steuerberater (Polen), Licensed appraiser
Senior Associate
Phone: +48 22 244 00 23

Major changes to the transfer pricing documentation obligations entered into force on 1 January 2017. Below we are outlining the more important changes in this area.

New elements (modules) of the transfer pricing documentation

The amended act introduces a three-level concept of the transfer pricing documentation which should consist of:

  • local file – containing details of transactions or other dealings between the Polish company and the other group components and disclosed in the books of account;
  • master file – containing information at the group level;
  • country-by-country (CbC) reporting.

Depending on the revenues and expenses disclosed in the books of account of the previous year taxpayers will be obliged to prepare the following elements:

  • local file – if revenues or expenses exceed EUR 2 million;
  • benchmarking study – if revenues or expenses exceed EUR 10 million;
  • master file – if revenues or expenses exceed EUR 20 million;
  • country-by country reporting – if consolidated revenues exceed EUR 750 (the report has to be filed by the holding company). 

New transfer pricing documentation deadlines 

Please note especially that the local file plus the benchmarking study of a tax year should be ready by the tax return filing deadline at the latest. Consequently, a taxpayer whose tax year is the same as the calendar year must prepare the transfer pricing documentation of 2017 by 2 April 2018. The master file must be submitted within the filing deadline by the entity responsible for its developing in the group.

Any follow-up transfer pricing documentation of transactions and dealings materially affecting the taxpayer's income (loss) will have to be periodically reviewed and updated in the subsequent years, at least once per tax year before the deadline for filing tax returns. The benchmarking study will also need to be updated at least every three years.

Taxpayers will still be obliged to present the complete transfer pricing documentation within 7 days of the request from the tax authorities.

New obligation to declare that the transfer pricing documentation has been prepared

According to the new regulations, a member of the management board of a local enterprise will have to sign a statement saying that the documentation has been prepared within the statutory deadline. The first statement on the transfer pricing documentation should be filed by 2 April 2018 with respect to transactions or other dealings in 2017. A failure to submit the statement or declaring untruth will entail fiscal and penal liability of the management board members. 

New simplified report (CIT/TP [PIT/TP] form)

Taxpayers who are obliged to prepare the transfer pricing documentation and whose revenues or expenses exceeded the equivalent of EUR 10 million in a tax year will be obliged to enclose with the annual tax return a simplified report on transactions and other dealings with associated enterprises or on payments made in connection with such dealings directly or indirectly to an entity established in a territory or a country applying harmful tax competition. 

The template of the simplified report (CIT-TP form) will be defined in a regulation of the Minister of Development and Finance which is most likely going to be published in the 1st quarter of this year. The first CIT-TP form for 2017 will have to be filed by 2 April 2018.

Our recommendations

Please be informed that the above regulations apply to transactions or other dealings which occurred in tax years beginning after 31 December 2016.

Given the short deadline for preparing the transfer pricing documentation of 2017 (normally: 2 April 2018) and how detailed the data have to be, we think that you should already take actions to duly and timely fulfil the new documentation obligations.

Additionally, be mindful that in the recent months we have noticed intensified tax inspections and investigations into transfer prices applied in 2011–2013. Please check if you have the transfer pricing documentation prepared according to the old rules with respect to transactions made in 2011–2016.

We would be glad to assist you in this process, especially when it comes to checking the obligations under the new laws.  In case of further questions, please do not hesitate to contact us. Our tax advisers in Rödl & Partner offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw will be happy to review your transfer pricing documentation and propose a solution to minimise your tax risks. We are also on hand to answer any other tax-related questions you may have.