Poland: Transfer pricing amendments 2019


published on April 18, 2019​


The new transfer pricing rules have been set out in a new chapter 1a of the Corporate Income Tax (CIT) Act with effect from 1 January 2019. The structure of the provisions introduced in chapter 1a shows directly that they are addressed to both tax authorities and taxpayers. The purpose of the amending statute was to simplify the complex provisions applicable since 2017, reduce the burdens related with the preparation of transfer pricing documentation and minimise problems with interpreting legislation.


Standardised terms and definitions

The amended CIT Act defines new key terms and simplifies already existing terms, such as ”associated enterprises”, so as to minimise any potential interpretation disputes. The definition of ”significant influence” includes three areas in which one entity may exert a significant influence on other entities:
  • influence resulting from ownership, management and control relations;
  • influence exerted by an individual even though he or she is not a member of an entity's governing or supervisory bodies;
  • influence resulting from family relations.


Since until the end of 2018 there was no legal definition of ”transaction”, the term ”transactions and dealings of one type” has been replaced in the transfer pricing provisions by the term ”controlled transaction”, which comprises any and all commercial, capital-related, financial and service activities, including restructuring, cost allocation agreements (CAA), partnership agreements, business collaboration agreements and liquidity management agreements.


New transaction thresholds

The new provisions raise the transaction thresholds, i.e. thresholds which trigger the obligation to prepare transfer pricing documentation once exceeded. Transaction values are to be denominated in PLN, and not in euro as was the case until 2018. The new provisions also say explicitly that transaction thresholds refer to net amounts (i.e. without VAT). The new transaction thresholds are as follows:
  • PLN 10,000,000 for the sale/purchase of merchandise, tangible assets, obtaining/granting debt financing, sureties or guarantees;
  • PLN 2,000,000 for the sale/purchase of services, intangible assets, rental, lease, licences;
  • PLN 100,000 for transactions with entities established in the so-called tax havens.


Information to be included in the local file

The act introduces changes to some components of the local file and master file so as ensure compliance with the OECD guidelines. According to the new provisions, the local file should include a description of an associated enterprise, a transaction analysis (including a functional analysis), a transfer pricing analysis, and financial information. It should be noted that according to the amended provisions, a transfer pricing analysis is mandatory in the local file. Until 2018, only taxpayers generating revenues or costs above 10 million euro were obliged to prepare a benchmarking study. The local file need not contain a benchmarking study or a compatibility analysis if it describes low value-added services or loans and fulfils the criteria specified in Articles 11f and 11g of the CIT Act (i.e. safe harbour rules for low value-added services and loans).


Amendments regarding the master file

The amendments regarding the master file include:
  • the threshold triggering the obligation to prepare a master file has been raised to PLN 200 million or its foreign currency equivalent (the amount refers to the consolidated revenues of entities included in a corporate group by full or proportional consolidation);
  • the obligation to prepare the master file is limited to entities subject to full or proportional consolidation;
  • a master file prepared by another entity is acceptable (provided that it complies with Polish law). acceptable is also the English version of the master file. However, tax authorities may request the Polish version of the master file to be submitted within 30 days.


New exemptions from the documentation obligation for certain controlled transactions

The legislator has introduced a list of transactions for which no transfer pricing documentation must be prepared with effect from 1 January 2019. The list also includes transactions made between entities associated exclusively through state ownership, or transactions effected by local government units. The exemption applies to, e.g., the following transactions:
  • transactions between domestic associated entities if they do not incur a tax loss and do not enjoy the exemption referred to in Article 6 of the CIT Act and the exemption from tax on income earned from a business activity conducted in a special economic zone or specified in a state aid decision referred to in the New Investment Support Act of 10 May 2018 (these conditions must be met jointly);
  • transactions governed by an advanced pricing agreement (Article 20a of the Tax Act) during the period covered by the decision;
  • transactions the total amount of which does not permanently represent revenues or tax-deductible costs, except financial transactions, capital transaction or transactions related with investments, tangible and intangible assets;
  • transactions between members of a tax-consolidated group.


New rules of accounting for certain transactions

With effect from 2019, the legislator introduced simplified solutions for certain transactions (safe harbours) which, if applied by the taxpayer, allow regarding a given transaction as an as arm's length transaction. Such solutions protect taxpayers from the risk that tax authorities will challenge the arm's length nature of the transfer price if the taxpayer complies with the relevant guidelines; they also exempt taxpayers from certain documentation obligations. The safe harbour solutions are available for two types of transactions, namely, loans and low value-added services.


Low value-added services

In the case of low value-added services, tax authorities will not assess the income or loss if the mark-up on the costs of such services is not higher than 5 percent for service purchases or is not lower than 5 percent for service supplies. In addition, the service provider may not have its registered office, domicile or management board in a territory or country applying harmful tax competition. The service provider must also have a detailed calculation of the amount of cost types included in the calculation and the procedure and reasons justifying the choice of the allocation keys for all entities using the services. Low value-added services are specified in detail in appendix no. 6 to the CIT Act, and include, among others, accounting and audit services, corporate financial services, HR services, IT services, communications and promotion services as well as legal, tax and office administration services.



In the case of loans, tax authorities will not assess an income (loss) on loan interest according to Article 11g(1) of the CIT Act, if the loan agreement is concluded for a period of up to five years, the agreement does not provide for any payments other than the loan interest (e.g. commission fees or premiums) and the interest rate as of the agreement date is based on the base rate plus a margin specified in the relevant announce­ment of the minister in charge of public finance. The total amount of loan liabilities or receivables may also not exceed PLN 20 million. In addition, the lender may not have a registered office, domicile or a management board in a territory or country applying harmful tax competition.


New transfer pricing reporting rules and deadlines

Starting from 2019, CIT/TP reports are replaced with electronic transfer pricing reports (TP-R). The purpose of the new reporting procedure is to, among others, ensure more effective selection of taxpayers to be investigated. The TP-R report should be simpler and more user-friendly than the CIT/TP report.

The amended statute has also extended the following deadlines:
  • the deadline for preparing the local file, submitting the statement confirming the preparation of the local file and information on transfer pricing has been extended from three to nine months from the end of the fiscal year;
  • the deadline for preparing the master file has been extended to 12 months from the end of the fiscal year.



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