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Taxpayers who conduct transactions with related entities have to comply with a number of documentation and information obligations, as required by transfer pricing regulations. However, an exemption from some of these obligations is available if certain requirements are met. To minimise the risk and reduce the workload, contact RSM Poland's tax advisors, who will precisely define the scope of necessary documents and analyses as well as assist in preparing relevant files and forms in a timely manner.
Why choose RSM Poland when verifying the existence of the documentation obligation?
Our professional analysis of transfer pricing obligations makes it possible to fully understand how specific actions and transactions affect the requirement to prepare relevant documentation. Our all-encompassing approach helps us to quickly identify situations which carry the obligation of preparing a transfer pricing information form (TPR) and Local File or Master File as well as to examine the possibility of obtaining exemptions prescribed in the law. When providing tax advisory services in this area:
- We minimise the risk of disputes with tax authorities – by thoroughly verifying the situation of the entity and checking its current and overdue obligations, we help taxpayers to properly fulfil all its obligations and avoid errors which might be detected during a tax audit or a customs and tax audit.
- We help to lower compliance costs – by analysing transactions conducted by our clients, we try to find legal ways for the examined entities or groups to obtain exemptions and be in compliance with the obligations with less workload and spending.
- We prepare necessary documentation – after specifying the exact scope of documents, RSM Poland's tax advisors support entities in preparing the benchmarks, TPR forms, so-called defence file or Local File and Master File which are necessary in a given case.
Verification of the existence of the obligation to prepare documents: step by step
1. Comprehensive analysis of the transactions conducted by the entity
The first steps consists in our team verifying all the transactions conducted by the entity or group with related entities and identifying those whose value exceeds the documentary thresholds set out in the regulations.
2. Examining the possibility of obtaining exemptions
Next step is to check whether the taxpayer meets the criteria for applying simplified settlements or obtaining an exemption from preparing transfer pricing documentation in whole or in part.
3. Support in compliance with current and overdue obligations to prepare documentation
Finally, we assist in complying with all the actions required by law within statutory time limits. Depending on the findings of the analysis, we prepare the benchmarks, TPR forms, so-called defence file as well as Local File and Master File which are required by Polish and international regulations.
Frequently asked questions: What should you know about the obligation to prepare transfer pricing documentation?
Related entities are those where one entity is influenced by the other by ownership, management, controlling, or family ties, or by the actual capability of a natural person to influence key economic decisions.
Verification of the existence of the transfer pricing documentation obligation must be made if the taxpayer fits the definition of a related entity or there is a suspicion of a controlled transaction whose value exceeds the set documentary thresholds – PLN 10 million for commercial transactions, PLN 10 million for financial transactions, PLN 2 million for service transactions, and PLN 2 million for other transactions or restructuring transactions (in addition, special and stricter rules apply to tax haven transactions).
The exemptions provided for by Polish law apply to domestic transactions which meet specific criteria, transactions whose value does not permanently constitute revenue or revenue earning cost (with exceptions), and certain reinvoicing and safe harbour transactions, among others.
Some transactions, despite being exempt from the obligation to prepare local file, will have to be reported in the transfer pricing information form (TPR).
Verification of transfer pricing documentation is a guarantee of tax security
The growing complexity of international fiscal regulations may cause taxpayers to overlook some obligations or make mistakes which will only be found during a tax audit at a later date. When a real risk of penalties and sanctions is present, competent management of transfer pricing becomes crucial.
Thanks to our experience in cooperating with domestic companies and multinational groups, we are able to thoroughly evaluate the scope of documentation and information obligations as well as take advantage of our know-how to considerably simplify the preparation of all the necessary files and reports. Contact us!
