Transfer pricing

In Poland compiling documentation of transfer pricing is a duty of many companies, especially for companies with capital of foreign investor. Transfer Pricing Documentation is compiled by companies concluding agreements, contracts and performing act of selling or purchasing goods and services from tied and connected companies. Ties and connections causing obligation of compiling documentation of transfer pricing have capital character – by shares, or personal – by persons and their relatives, who are shareholders or member of company’s authority.

Obligation to compile documentation concerns economic transactions:

• Between companies tied by shares directly or indirectly – 5% of share in personal, family, and material capital
• Between foreign company and its branch in Poland
• Also by reason of paying amount due from Poland which is directly or indirectly paid for the offshore company account, and if resulting from the agreement  or really paid in a fiscal year total sum of service exceed 20.000 EURO.

In relation to tied companies obligation of compiling documentation involve fiscal years, in which:

• Either an agreement was concluded, and it results that sum from agreement will exceed equivalent of 30.000 EURO in case of services and intangible assets or 50.000 EURO – in remaining cases,
• Or whole sum really paid in fiscal year exceed mentioned sums.

Why you should compile mentioned documentation?

Polish Accountancy Act obliges companies to reveal information about essential transactions made with subjects which are tied or connected by company on conditions different than market. Therefore in case of companies compiling an audit it is essential to present to auditor the appropriate transfer pricing documentation.


Why you should prepare this documentation before tax authority calls You to present it?
Compiling of transfer pricing documentation always lasts longer than seven calendar days. Company which will not present such a documentation for tax authority’s call may suffer the following punishments:

• Risk of an income assessment by tax authority and cancellation of income deductible costs,
• Risk of applying 50% rate of income tax (CIT),
• Risk of value added tax (VAT) corrections,
• Fiscal penalties risk for companies’ authorities

Transfer pricing documentation cost made by TDP depend on amount of agreements, complication extent, analysis of presented actual state, and delivered documents.