On September 4th of this year, the Ministry of Finance published the latest (fifth) version of the TPR Guide, which includes an updated summary of answers regarding transfer pricing reporting obligations. Below, we outline the new topics covered in the latest version of the TPR Guide.
New items in the section on general issues
- If an entity submitted the TPR Information for 2023 using the TPR-C(5) form, it should use the same form when submitting a correction (Question 21)
- In the case of a company dissolved during the tax year, the company should fulfill its transfer pricing reporting obligations before the end of its operations – i.e., before its dissolution and removal from the register (Question 22)
- If a Polish entity was acquired by a foreign entity without closing its accounting books, it should submit the TPR Information before its dissolution and removal from the register. Since the acquired entity, without closing its accounting books, will not have access to data from an approved financial statement needed to calculate the indicators in section C, it should use the available documentation, such as accounting records, to calculate the indicators. If, despite exercising due diligence, the entity finds it impossible to calculate the indicators, the value "0" should be entered in the relevant fields (Question 23)
- The acquiring company should submit separate TPR Information for each acquired company if the acquisition involved closing the accounting books of the acquired companies. If the accounting books were not closed, the acquiring company should include the transactions of the acquired companies in its own TPR Information (Question 24)
New items in Section A regarding the place and purpose of submission
- A general partnership should submit transfer pricing information on the TPR-C form if its partners are not exclusively individuals, and the partnership has not submitted the CIT-15J form. If the partnership has submitted the CIT-15J form or its partners are exclusively individuals, the partnership should submit the transfer pricing information on the TPR-P form (Question 26);
- When the acquiring entity submits separate TPR Information for the acquired entity, the TPR Information (version 5) for the acquired entity is submitted to the head of the tax office appropriate for the acquiring entity. The acquiring entity provides its identification details in Section B of the form, while Sections C, D, and F reflect the details of the acquired entity. In Section A, the acquiring entity specifies its own tax office but indicates the period and purpose relevant to the acquired entity. Additionally, in Section E, Additional Information, the acquiring entity must include the following note: "TPR Information submitted for the acquired entity [NIP, Name, Address, predominant PKD]." The NIP (tax identification number) should be entered as a string of digits (without spaces or hyphens). The TPR Information is signed by the acquiring entity (Question 28).
New Items in Section C Regarding Additional Data of the Entity Covered by the Information:
- To determine whether an entity qualifies as a micro or small entity for selecting the "Type of Entity" field in Section C of the TPR Information, the criteria specified in the Accounting Act should be used. At the same time, for entities that do not prepare financial statements in accordance with the Accounting Act but have the status of a micro-entrepreneur or small entrepreneur under the Entrepreneurs' Law, this section should also select indicators relevant to micro-entrepreneurs or small entrepreneurs. If it is not possible to calculate the indicators according to the formulas specified in Tables 2-6 of the TPR Explanations, the value "0" should be entered in the indicator fields (Question 41);
- Financial indicators are calculated based on data from an approved financial statement. If the entity submitting the TPR Information is not required to prepare financial statements (this question pertained to individuals not conducting business activities) and cannot calculate the financial indicators, the value "0" should be entered in their place. Additionally, the inability to calculate the indicators should be noted in Section E, Additional Information (Question 42);
- Selecting a micro or small entity from the "Type of Entity" list in Section C of the TPR Information, as defined by the Accounting Act, does not provide the basis for using the exemption specified in Article 11q, paragraph 3a of the CIT Act (the exemption stating that local transfer pricing documentation may not need to include a benchmarking or compliance analysis). According to Article 11q, paragraph 3b of the CIT Act, the right to use this simplification applies to entities that meet the specific conditions set forth in the Entrepreneurs' Law (Question 43).
New Items in Section D Regarding Transaction Data
- The transaction values per country in Section D of the TPR form do not need to add up to the total transaction value if the difference results from the requirement to report the transaction value per country in thousands of Polish zloty. Consequently, after rounding, the sum of transaction values per country may differ from the total transaction value, and this discrepancy should not be treated as an error (Question 60);
- The conditions for using the safe harbour simplification for low-value-adding service transactions are found in Article 11f of the CIT Act (Article 23r of the PIT Act), and for financial transactions in Article 11g of the CIT Act (Article 23s of the PIT Act). Based on these provisions, one can assess the appropriateness of selecting transactions from categories B and D benefiting from the safe harbour simplification in the TPR form (Question 61).
Important: The TPR Guide does not constitute a general interpretation of tax law provisions or tax explanations (tax clarifications) within the meaning of the Act of August 29, 1997, the Tax Ordinance (Journal of Laws of 2023, item 2383). For this reason, it should be regarded more as a guideline and a supplement to the transfer pricing regulations.
Additionally, a new point (point 7) has been added to the website section regarding General Explanations for TPR Information, which includes a link to a glossary of terms related to handling interactive forms and the e-Deklaracje application.
It is worth reminding that the deadline for submitting transfer pricing information for 2023 is 11 months after the end of the tax year. For taxpayers whose tax year aligns with the calendar year, this deadline is November 30, 2024.
Should you have any questions or concerns regarding the information mentioned, feel free to contact us!
