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Postponement of deadlines for the fulfilment of transfer pricing obligations

What an unexpected twist – the Polish Government proposes to postpone the deadline for the fulfilment of transfer pricing obligations. These changes are included in the next anti-crisis draft act on subsidizing interest rates on bank loans granted to ensure financial liquidity of businesses affected by COVID-19 and amendments to some related acts (hereinafter: Shield 4.0), published on 28 May on the website of the Government Legislation Centre. Pursuant to the proposed changes, taxpayers will be given three additional months to meet the reporting obligations concerning transfer pricing. Below we discuss the scope of these changes.

Good news for taxpayers obliged to submit transfer pricing documentation for the year 2019. Until now, the anti-crisis shield provided only for the postponement of the deadline for submitting the TPR, the statement on preparing the local file and the addition of the master file to the local file for entities whose tax year began after 31 December 2018 and ended by 31 December 2019 (they had a short tax year) – we have informed you of this change here.

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It seems, however, that the voices of entrepreneurs and tax advisors have been heard and currently the Polish Sejm is working to postpone the deadlines for:

  • the submission of TPR;
  • the submission of the statement on preparing the local file

a) until 31 December 2020 – if the original deadline falls between 31 March 2020 and 30 September 2020;

b) by 3 months – if the original deadline falls between 1 October 2020 and 31 January 2021.

It means that for the majority of taxpayers whose reporting year corresponds to the calendar year the deadline will be 31 December 2020, not 30 September – provided the projected changes come into effect exactly as proposed.

The draft Shield 4.0 provides for the postponement of the deadline for the submission of the master file until the end of third consecutive month counting from the day following the original deadline for the submission. Thus, if the original deadline for the submission of the local file is 31 December 2020,  the. master file will have to be added to the local file by the end of March 2021.

Indeed, the above changes proposed by the Public Finance Committee seem quite positive. Due to the current state of the COVID-19 epidemic, a great majority of taxpayers may struggle to meet the transfer pricing deadlines.

Currently, the draft Shield 4.0 passed the second reading at the Sejm and has been again forwarded to the Public Finance Committee. It seems very likely that the abovementioned changes will be approved in their entirety by the Sejm (perhaps already at the beginning of June) and announced in the Journal of Laws. We will keep you informed of how this is progressing.

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Should you have any questions or need to discuss the topic, we encourage you to contact out expert, Tomasz BEGER:

e-mail:ekspert@rsmpoland.pl

tel. +48 61 8515 766

fax +48 61 8515 786

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