New transfer pricing requirements in Poland

The amendment of Poland’s CIT act includes substantial changes to required transfer pricing documentation for taxpayers.

Recent amendments to Poland’s Corporate Income Tax act includes substantial changes to taxpayer’s required transfer pricing documentation. The new rules are in effect from 1 January 2017 - however CBC reporting obligation starts from 2016.

The related entities threshold will rise from a shareholding of 5% to a shareholding of 25%. The transfer pricing requirements will be determined based on the taxpayer’s business size.

  • If in a preceding tax year the taxpayer’s total annual cost or revenue did not exceed €2m there will be no obligation for transfer pricing documentation for transactions with related parties.
  • Taxpayers exceeding the €2m threshold will be obliged to prepare transfer pricing documentation and to submit a statement confirming the completeness of the documentation within the annual income tax return deadline.
  • After exceeding the €10m threshold, a Polish comparable data analysis (benchmarking study) and reconciliation of the financial data with the approved financial statements will be required. Also, submission of the additional attachment to the annual income tax return (CIT-TP form), being a summary of data presented in the documentation.
  • If a taxpayer exceeds the €20m threshold, a master file (transfer pricing documentation at group level) will be required.

The value threshold of transactions subject to reporting will also, on principle, depend on the taxpayer’s business size and will vary from €50,000 €500,000.

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Our experts in Poland can assist with analysis of the thresholds, indication of reporting obligations, identification of potential risks and introductions to tax advisors if and where required.

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