Polish Deal 3.0 - further significant changes in transfer pricing

The Act of October 7, 2022, signed by the Polish President, amending the act on corporate income tax and certain other acts, called the Polish Deal 3.0, will come into force on January 1, 2023. It introduces further significant changes to transfer pricing.
Author:
Olga Kucewicz
Junior TAX Manager

The most important changes introduced by the Polish Deal 3.0 include:

  1. repealing the obligation to document indirect tax haven transactions;
  2. increasing the documentation thresholds for direct tax haven transactions - according to the amendment, the thresholds will be:
    1. 2.5 million PLN - for financial transactions,
    2. 500 thousand PLN - for non-financial transactions.
  3. clarifying  provisions relating to a foreign establishment located in a country that is on the list of so-called tax havens.

Important: It is specified that the documentation thresholds listed above also apply in this case. Transfer pricing documentation must be prepared when these amounts are exceeded.

An important aspect of these changes is the effective date. While the amended provision which applies to establishments will come into force on January 1, 2023, both the repeal of  obligations to document indirect tax heaven transactions, and the increase in the thresholds for transactions carried out directly with tax haven, have been retroactively applied and will apply to transactions carried out from January, 1 2023. These changes, especially in the area of indirect tax haven transactions, should be viewed positively.

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