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Hello World: starting an adventure with Transfer Pricing

Mateusz CHŁOSTA
tax advisor, Junior Tax Manager at RSM Poland

Anyone who has ever had the pleasure of attending classes in programming almost certainly had the chance to plumb the mysteries of a programming language known as Turbo Pascal. If so, the phrase in the title of our first post surely sounds familiar. "Hello World" – the words our very first "programme" would usually display on the monitor of our computer. Back then, these two words meant the beginning of an adventure with a new, inspiring tool that would offer tremendous opportunities, namely programming. What better title could there be to celebrate the start of an adventure that may perhaps be different, but still as fascinating and inviting: an adventure with transfer pricing.

Catching up with the rest of the world

Transfer pricing (Polish: ceny transferowe) is a notion that has been recently going through a true revival. The number of available studies, drafts of changes and reports generated and published by international organisations will make your senses reel. OECD seems to be exceptionally active in the field. The organisation is currently involved with an extensive, overarching project called BEPS (Base Erosion and Profit Shifting). Apart from BASE, OECD has also published other reports or draft reports on the subject matter, e.g. Dealing Effectively with Challenges of Transfer Pricing (2012) and Draft Handbook on Transfer Pricing Risk Assessment (2013). Also the European Commission has thrown in its two coins by establishing the Joint Transfer Pricing Forum (JTPF). The JTPF has successfully published three reports so far that can be recommended as a rich source of many practical guidelines: Report on Secondary AdjustmentsReport on Transfer Pricing Risk Management and Report on Compensating Adjustments. As recent changes in domestic regulations have shown, both the Polish tax authorities and legislators are determined to catch up with the rest of the world by introducing solutions for settling and documenting transactions between affiliated companies. Truth be said, the amendment of outdated regulations, or perhaps rather the introduction of entirely new solutions, comes with a significant delay when compared to the rest of the world. However, it is to be expected that changes will be introduced faster in the future.

Time for transfer pricing

To learn all that you need about transfer pricing is a very time-consuming process. And time, as we know, is one of today's most valuable resources. Since we can't just buy ourselves a few extra hours on eBay and the day is still going to have only 24 of them, we came up with the idea to start a blog. Thanks to this blog we will be able to handle all the information sources mentioned above, and much more. Its primary aim is to introduce you, dear readers, to the most interesting aspects of transfer pricing that have been recently or still are being discussed on the international arena, and ones that are surely going to influence future changes in Polish regulations.  We promise to make sure that each subject discussed is presented in a practical and concise manner, and the language to be as user-friendly as possible, meaning free from legal and financial speak wherever possible. Of course, we shall not forget our own domestic backyard. We are looking forward to commenting recent and proposed changes in law, as well as what we find to be some of the more interesting decisions of administrative courts.

Please feel invited to comment our posts. If you would like to discuss transfer pricing in more detail, you are welcome to contact us directly.