The validity of transfer pricing analyses prepared by taxpayers for 2017 expired in 2020. Some companies, due to possible changes in the market in which they operate, should check whether there was a need to update their analyses prepared later than 2017.
By the end of December this year, taxpayers who have a tax year coinciding with the calendar year and who in 2020 completed transactions with related entities with a value exceeding the statutory limits of:
- PLN 10,000,000 in the case of a commodity transaction or financial transaction
- PLN 2,000,000 in the case of a service transaction or other transaction
- PLN 100,000 in the case of transactions with entities from tax havens
are required to prepare local transfer pricing documentation for these transactions and a statement on preparation of local transfer pricing documentation and application of market prices, and to complete the TP-R form.
The reporting obligations include:
- Statement on preparation of local transfer pricing documentation (submitted to the relevant tax office)
- TP-R form (submitted to the head of the National Revenue Administration)
- Information about the group of entities (CbC-R form)
- Notification regarding the obligation to provide information on the group of entities (CbC-P form).
|Reporting obligation||Deadline for submission||Deadline for submission—changes related to COVID-19||Obligated entity|
|TP statement||By the end of the 9th month after the end of the financial year||By 30 September 2021 if the time limit expires between 1 February 2021 and 30 June 2021 An extension by 3 months if the time limit expires between 1 July 2021 and 31 December 2021||Related entities required to prepare local transfer pricing documentation|
|TP-R form||By the end of the 9th month after the end of the financial year||Related entities required to prepare local transfer pricing documentation and related entities with their residence, registered office or management in Poland, to which the obligation to prepare local transfer pricing documentation does not apply|
|CbC-R form||By the end of the 12th month after the end of the financial year||No changes||Parent entities that are part of the group of entities and have their registered office or management in Poland (in cases specified in the Act on Exchange of Tax Information with Other Countries, also entities that are not parent entities)|
|CbC-P form||Within 3 months from the end of the financial year of the group of entities||No changes||Each entity within a group of entities, if its results are consolidated in the group’s financial statement and the group’s consolidated annual revenue exceeds EUR 750,000,000|
Entities preparing transfer pricing documentation must also submit a statement to the relevant tax office on preparation of the TP documentation and the application of market prices in mutual settlements.
Who takes responsibility?
Due to the COVID-19 pandemic, rules for signing TP statements are simplified. Under normal circumstances, the statement would have to be signed by the management board of the company, but during the pandemic the statement may be signed by any persons authorized to represent the unit. Please note that it is not allowed to submit a statement by an attorney. A model statement can be found on the website of the Ministry of Finance.
All transactions subject to the documentation obligation in 2020 should be reported in the TP-R form. Importantly, domestic transactions exempt from the obligation to prepare documentation pursuant to Art. 11n of the CIT Act are also subject to reporting. Please note that the TP-R form for 2020 is different than the TP-R form for 2019, so it is not enough to update the previous document. The form may only be submitted in electronic form via the e-Deklaracje system.
Penalties for failure to fulfil obligations
In the case of failure to submit a TP statement on preparation of local transfer pricing documentation and the TP-R form, submitting them after the deadline, or providing false statements, taxpayers may face financial penalties under the Fiscal Penal Code, which may amount to up to PLN 27,000,000.
This is the last moment to fulfil the transfer pricing obligations for 2020, so in case of any doubts, please contact us!