Transfer pricing in Poland

The scope of the services we offer covers assistance in both developing a transfer pricing policy and preparing tax documents as well as fulfilling the reporting duties. We prepare local files, benchmark analyses, compliance analyses as well as master files. We provide tax documentation so that they are optimum and safe in terms of business and taxes.

Year by year the effectiveness of tax inspections increases in relation to transactions made between related entities. New reporting tools that support analytical activities of tax bodies make it possible to much more quickly and efficiently select those entities for inspection that are very likely to commit mistakes in the area of transfer pricing.

Adverse consequences of disclosing any incorrectness in this area may be disastrous to a taxpayer. The tax bodies have the right to independently assess the amount of tax revenues (or costs) when the prices applied to trade with related entities do not correspond to the market prices and, thus, the income is “transferred” in full or in part to other countries or entities.

The year 2019 also notes a stricter preventive policy oriented to sanctioning a taxpayer that, despite holding complete documentation for transfer pricing, does not apply the arm’s length principle and underrates the base of taxation. This stricter policy is demonstrated, for instance, by introducing a new institution such as additional tax liability which may reach as much as 30% of the amount of an unduly disclosed or overrated tax loss and the amount of an undisclosed taxable income in full or in part. Therefore, a risk resulting from the failure to prepare the documentation of transactions with related entities or to observe the arm’s length principle is enormous. Our experience shows that it might even cause a business to go bankrupt.

Contact Tomasz BEGER