The management of transfer pricing risks and the fulfilment of the obligation to draw up the tax documentation on a taxpayer's transaction with related entities is one from key business issues.
The aim of the workshops is to transfer knowledge and skills in drawing up tax documentation in the light of Polish and international tax regulations and to enable taxpayers to reduce the risk of tax authorities' estimates of income on transactions with related entities.
Training takes place in 3 Star Hotel Black Stream in Zakopane Center, about 800m from Krupówki.
Time limit for training
Buried, 20–22 August 2014
Driver
Dr.
Andrzej Dmowski - Doctor of Legal Sciences, Lawyer, Tax Advisor, Certified Public Accountant – Expert Auditor in Ireland, Certified Fraud Examiner - Expert on Crime Detection and Economic Abuse, Certified Internal Controls Auditor - International Internal Auditor, Graduate of University of Cambridge - British Centre for English and European Legal Studies - Faculty of Law and Administration, Graduate and Fellow of the Faculty of Law and Administration of the University of Warsaw.
Specializes in settlement of transactions between related entities - transfer pricing, legal and tax aspects of M&A and issues concerning derivatives of financial instruments.
Programme
Part I New rules on how and how to determine the income of legal persons by way of estimates in force from 18 July 2013
• Analysis of transaction comparability
• Basic methods for determining taxable income by price estimation
• Determination of income using transaction profit methods
- Specific cases and conditions for determining the market value of intangible goods and services
- Restructuring of activities
- Procedure for the correction of tax liabilities
- Method and mode of elimination of double taxation in the event of adjustment of profits of related entities
- Example of low value added service directory
- Example of the shareholder’s expenditure catalogue
Tax records:
- • standardisation and centralisation of tax documentation at Group level
- • documentation elements
- • transfer prices and company financial security
- • rate 50%
- • criminal liability – tax liability
Preferred pricing methods – general assumptions:
- • traditional pricing methods
- • method of comparable uncontrolled price (in the internal price comparison option and external price comparison),
- • method of selling (in the internal comparison of gross profit margin and external comparison of gross profit margin),
- • the method of reasonable margin ‘cost plus’ (in the internal comparison option of gross profit margin, and external comparison of gross profit margin),
- • transaction profit methods,
- • method of distribution of profits (in the residual analysis option and in the share analysis option)
- • Net transaction margin method (in the internal comparison of net profit margin and external comparison of net profit margin),
Risk of revenue shifting between related parties:
- • evidence weight
- • burdening the Polish branch with management costs
- • leasing of property to another taxpayer for symbolic payment
- • comparison of profit as a constitutional condition for determining the transfer of income
- • Declaratory decision determining the amount of revenue
Part II Case Study – drawing up the tax documentation of the commodity transaction within the group:
• Documentation of transactions between related parties:
- • documentation design
- • definition of the obligation to prepare documentation
- • explanations of the Ministry of Finance
- • determination of transaction size
- • transaction documentation and other information obligations
- • the consequences of failure to produce documentation
- • tax authorities' practice of auditing tax records
- • Revenue of the ‘found’ of the foreign entrepreneur.
Preparation of model tax documentation:
- • practical application of valuation methods
- • doubts about the correct selection of the valuation method
Sales of goods/products to related parties:
- • determination of the calculation value
- • factors affecting transaction value
- • economic strategy and non-market nature of transactions
Purchase of goods/products within the group:
- • International group price list
- • purchase at dumped prices / below production costs
- • Purchase of goods/products which are incomparable goods within the capital group
- • problems with the selection of the calculation method
- • no data comparability
- • Other commodity transactions
- • calculation of the cost base
- • profit margin analysis
- • Restructuring of activities
- • reallocation of the functions of the entities involved
- • asset reallocation
- • reallocation of risks
Part III Case Study — Group service transactions:
• Sale of tangible services to other entities in the group:
- • comparability of transactions
- • Scope of services
- • sample settlement of engineering, assembly, forwarding services,
Purchase of material services from related parties:
- • purchase of construction, testing, logistics services
- • range of services to all entities in the group
Specific methods for determining the market value of the transaction:
- • methods for determining the market value of intangible goods and services
- • advertising services within the group
Group financial services:
- • the conditions of the loans granted and the charge of transfer of income
- • group bonds and guarantees
- • cash pooling / cash netting
- • Financial derivatives and exchange rate risk within the group
Intangible services within the group:
- • advisory and management services
- • management feed
- • maintanance services
- • Specific models for calculating remuneration for intangible services
- • fixed price
- • lump sum
- • allocation keys
- • hourly rate
- • estimates (fixed and variable)
- • percentage of the financial ratio,
- • other models.
Assessment of transactions between related parties:
- • the establishment of trade contacts between associated entities must not cause negative tax effects
- • liability of the entity for tax liability of another subsidiary
- • links between foreign suppliers
- • giving up a permanent measure and shifting income
- • adjustment Article 11 CIT where there has been no actual reduction in tax receivables
- • periodic benefits and transfer prices
- • estimation of income by tax authorities and tax on goods and services
- • the risk of the tax authorities questioning the price calculation adopted
- • cost shifting in the event of the liquidation of a related company – ECJ judgment in Marks & Spencer plc v David Halsey (C-446/03).
- • the Arbitration Convention on the elimination of double taxation in relation to the correction of profits of related companies — 90/436/EWG
- • prior price agreements.
Discussion on topics proposed by participants.
Organisational information
Hotel Black Potok *** Zakopane
Zakopane, Tetmajera St. 20
- Special price 1,599 PLN, price valid to 11 July 2014.
- Hotel info: http://www.czarnypotok.pl/
Price includes
- 2 accommodation in 3* Hotel Black Potok Zakopane (accommodation in 2-personal rooms, accommodation in 1-a personal room is charged 150 PLN daily)
- dinner at the Jar inn (Concert of the Highland Band)
- two SPA treatments
- unlimited use of pools and saunas
- full board
- participation in training
- training materials (materials, certificate, pen, notebook)
- Parking
- Organisational care