Transfer pricing documentation and tax and customs-tax audits

Transfer pricing audits in Poland are entering a new phase. Data from the Ministry of Finance shows that merely preparing documentation is no longer sufficient. In an era of increasingly effective tax audits and customs-tax audits, high-quality transfer pricing documentation, including a reliably prepared benchmarking analysis, has become a key line of defence for businesses against record-breaking tax adjustments.

The consequences of poorly prepared documentation can be severe. If an adjustment is made, the taxpayer is also subject to an additional tax liability under Articles 58a-58c of the Tax Ordinance Act (ranging, depending on the circumstances, from 10% to as much as 30% of the adjustment amount).

Statistics on transfer pricing audits in Poland according to official reports of the National Revenue Administration

Experts note that the mere formal possession of transfer pricing documentation does not protect taxpayers from risk, as the tax authorities do not limit themselves solely to verifying compliance with statutory requirements.

Currently, with access to data from TPR reports, the tax authorities are more effective at selecting entities for audit and conducting in-depth analyses. Auditors perform their own benchmarking studies, examine companies’ functional profiles and meticulously verify whether the settlement model described in the documentation reflects the entity’s actual business activities.

As a result, the quality of documentation, its consistency with other documents (such as agreements and invoices), and a properly conducted benchmarking analysis have become critically important.

An analysis of the figures shows that fewer customs-tax audits were conducted by the National Revenue Administration in 2025 than in 2024. In 2024, 236 transfer pricing audits were carried out, whereas in 2025 this number fell to 209.

It may therefore appear that the National Revenue Administration has reduced its activity in this area. However, this would be a misleading impression. The lower number of audits rather indicates a change in strategy, as evidenced by the increased effectiveness of audit activities: between 2024 and 2025, the value of income adjustments resulting from customs-tax audits increased from PLN 760.31 million to PLN 856.82 million. 

This means that officials decide to initiate a customs-tax audit only after a preliminary yet highly detailed analysis of a taxpayer’s settlements based on the documentation available to them, allowing them to more accurately identify entities whose transactions with related parties may deviate from arm’s length conditions. 

How should transfer pricing documentation be prepared to effectively protect against disputes with the tax authorities?

The Polish tax authorities have specialised teams that do not merely check whether a taxpayer has prepared transfer pricing documentation. They also conduct their own benchmarking analyses and verify whether the settlement model applied is consistent with market conditions.

Properly prepared transfer pricing documentation is therefore essential – it serves as the taxpayer’s primary tool for documenting how a transaction was carried out and demonstrating that the terms applied between related entities comply with the arm’s length principle. Through reliable benchmarking studies and detailed descriptions of the transaction under review, including a functional analysis, the entity gains a tool that enables it to defend more effectively the settlements agreed with related parties against income adjustments imposed by the tax authorities.

Low-quality documentation (or the absence thereof) has a direct impact on the effectiveness of tax audits and customs-tax audits, while inaccuracies in documentation and non-arm’s length settlements with related entities may lead not only to significant tax adjustments but also to fiscal penal liability for company management board members. Failure to prepare documentation, or preparing documentation that does not reflect the actual state of affairs, may result in a fine of up to 720 daily penalty units. Preparing documentation after the statutory deadline, on the other hand, may result in a penalty of up to 240 daily penalty units (Article 56c of the Fiscal Penal Code).

For transfer pricing documentation to provide effective protection against challenges from the tax authorities, it should meet the following conditions:

• financial data must be fully consistent with the information contained in agreements and invoices – a lack of consistency is a red flag for the tax authorities,
• the transaction, including the functional analysis, should be described accurately and in detail – this enables a clear presentation of the factual circumstances that form the basis for a reliable benchmarking analysis,
• benchmarking studies require an appropriate approach and regular updates – unreliable or outdated benchmarks do not work in the taxpayer’s favour; quite the opposite, they signal to customs-tax and fiscal authorities that an audit may produce favourable results – for the tax authorities, not the taxpayer.

Key risk areas: what may trigger a transfer pricing audit? 

As the tax authorities increasingly rely on sophisticated analytical tools rather than chance when selecting entities for transfer pricing audits, taxpayers should focus on ensuring that the data presented in filings and documentation submitted to the authorities is as consistent and comprehensive as possible. The following factors in particular may attract the attention of the Polish tax authorities:

• financial results that deviate from the norms accepted within the taxpayer’s industry (especially artificial loss generation or margin suppression),
• reporting losses (even a single year of losses may trigger an audit),
• a substantial decline in revenue volumes,
• inconsistencies between data included in the TPR-C form and withholding tax settlements,
• any discrepancies in reported data. 

In the near future, this list will be expanded to include inconsistencies between data contained in the TPR-C form and JPK-CIT filings.

The conclusion is clear: a professional transfer pricing protection strategy should include not only the reliable preparation of local file documentation but also a comprehensive system for collecting evidence confirming the arm’s length nature of transactions. In this case, more means more.

Would you like to prepare your company for a transfer pricing audit and ensure that your transfer pricing documentation is prepared diligently, taking into account key risk areas and increasing the chances of avoiding a dispute with the tax authorities? Contact our advisory team, which can prepare the documentation or conduct an audit of your existing transfer pricing documentation and ensure that it is consistent with the guidelines of the Ministry of Finance and the Organisation for Economic Co-operation and Development (OECD).