A statement on preparing transfer pricing documentation: who signs it and who bears responsibility?
As we have already informed you several times, on 1 January 2017 new regulations on transfer pricing came into force. This time, we would like to draw your attention to the issue of who is responsible for submitting the statement confirming the preparation of tax documentation.
The obligation to submit a written statement on preparing complete transfer pricing documentation by the taxpayer has been introduced by the newly added Article 9a Section 7 of the CIT Act. In accordance with the above provision, such a statement should be submitted together with the CIT-8 tax return document within the time provided to submit the document. Therefore, for the taxpayers whose fiscal year coincides with the calendar year, the first deadline for submitting such a statement will be 31 March 2018.
However, it may be difficult to identify the person responsible for signing the declaration in question. The provisions of the CIT Act do not in fact indicate directly who bears such an obligation. Still, in the explanatory memorandum to the bill introducing the above-mentioned provision we may read that: The issues concerning the transfer pricing policy touch on a series of management accounting issues or strategic decisions of the group. Therefore, a reliable confirmation of the completeness of the tax documentation prepared is possible only on the level of the national entity's management board. Thus, in our opinion, it should be assumed that the person liable to sign the statement on possessing transfer pricing documentation can only be a member of the management board, and this person cannot assign the obligation in question to another person.
The penal-fiscal liability for the failure to submit such a statement in time, or for submitting a false statement, should also be mentioned here. Although the classification of such acts is not clearly regulated by the law, one has to bear in mind that such a type of failure may be treated by the tax authorities in the same way as delays in submitting the required tax information to a competent tax authority, or as submitting false information. Such acts are punishable by a fine (Art. 80 §1 and §3 of the Fiscal Penal Code Act).
In summary, the obligation to sign a statement confirming that the taxpayer has prepared complete transfer pricing documentation rests on the management board members, and it cannot be transferred to another person. The wide range of possible sanctions to apply in case of failure to meet this obligation should, in turn, encourage the taxpayers to fulfil the new duty in an effective and timely manner.
If you have any questions or need to discuss the topic, you are strongly encouraged to contact our expert, Tomasz BEGER:
tel. +48 61 8515 766
fax +48 61 8515 786