On 1 January 2017 new transfer pricing regulations came into force. As of that date Polish taxpayers are obligated to prepare transfer pricing documentation according to newrequirements.
These changes are in majority a transposition of Base Erosion and Profit Shifting (BEPS) Action Plan prepared by the OECD, which aims to avoid aggressive tax optimization resulting in little or no overall corporate tax being paid.
Main changes in transfer pricing provisions include:
New types of TP documentations and declarations introduced by currently binding regulations:
Standard TP document, comparable to the one prepared based on regulations in force until the end of 2016, some requirements were modified or extended.
Additional analysis prepared when revenues or costs of a taxpayer exceed EUR 10 million
Master file is prepared in reference to group of entities when revenues or costs of a taxpayer exceed EUR 20 million. The documentation is prepared at the group level, covers structure, functions etc.
Separate form presenting information about entities from the whole group (applies to groups whose consolidated revenues exceed EUR 750 million), filed by consolidating entity.
New return concerning intra-group transactions, submitted annually (covers taxpayers whose annual revenues / costs exceed EUR 10 million)
Entities are considered as related parties primarily based on capital relations. The threshold of the direct or indirect participation amounts now to 25%. Nevertheless other relations, such as personal (in particular: family) connections between individuals holding specific positions in different entities, are also considered.
Moreover, entities conducting business activity in the form of partnerships (not being legal persons) have become subject to documentation requirements.
WHAT IS THE DEADLINE FOR PREPARING TRANSFER PRICING DOCUMENTATION?
Deadline for preparing TP documentation falls on the date for submitting the annual corporate income tax return, which is 3 months after year-end.
Management board will be obliged to sign a statement confirming preparation of TP documentation within this deadline.
As a rule, TP documentation should be disclosed within 7 days upon tax authorities’ request.
Obligation to prepare TP documentations applies to:
As a rule, taxpayers whose revenues or costs (accounting) did not exceed in the year preceding the tax year the equivalent of EUR 2 million, will not be required to prepare tax documentation.
Exceeding the threshold of EUR 2 million results in such an obligation in the next fiscal year, even if the values in the year for which the taxpayer is required to prepare documentation, are lower.
We present you
Designed to facilitate the identification of documentation obligations in terms of prices transfer rates based on the provisions from January 1, 2017. The verifier is used in particular, companies keeping accounting books and allows in a simple way assess whether a given entity is subject to new regulations.