Step 1. Preparation
6 steps to TP without (active) repentance
Due to the COVID-19 pandemic, the deadline for submission of the local file and TPR form for 2020 has been extended to 31 December 2021.
To help you avoid stress and the need for active repentance due to potential delays or errors, we offer structured company support. We encourage you to begin preparing your companies for fulfilling all transfer pricing obligations at the earliest opportunity.
It is worth beginning by verifying the list of related parties. As of 1 January 2019, a new definition of such entities is in place, which also includes any personal relationship with a natural person involving the latter’s actual ability to influence key business decisions made by another entity. We would point out that you may have entered into transactions with entities that you did not consider related but which the tax authorities may believe to have the ability to influence your decisions.
Next, we encourage you to identify the transactions that will need to be documented under Article 11k(2) of the CIT Act. This provision organizes transaction types into categories and defines documentation thresholds. You should also consider transactions with entities based in countries applying harmful tax competition. In this case, the value threshold from which the documentation obligation arises is PLN 100,000.
Finally, you should plan how much time and resources to allocate to further reporting obligations, i.e. filing TPRs, preparing benchmarking studies, the local file and the transfer pricing statement, and other obligations applicable to certain taxpayers.
How we can assist
Our support includes:
- audit of relationships between entities;
- identification of transactions required to be documented;
- breakdown of documentation obligations into key milestones;
- development of an action plan.