Start 2019 new rules on transfer pricing have become applicable, which also regulate information obligations. Under the new comprehensive regulation, taxpayers will be required to submit a new type of report – information on the TP-R transfer prices. Work on developing the right content is still ongoing.
On the basis of the Transfer Price Information Regulation and the published file structure projects, we have been able to see how detailed information is expected from KAS taxpayers, as part of new information on TP.
In view of the wide range of changes made and the new rules which are more favourable to taxpayers, the legislator has decided to apply a specific transitional provision whereby taxpayers can choose a regime to document transactions carried out in 2018.
The situation is not facilitated by the fact that the rules that are being replaced are also new to taxpayers, as they were only valid two years 1 January 2017 to 31 December 2018. In the context of all this information, taxpayers have doubts about what rigor to apply and which information should therefore be prepared.
With some help comes the Ministry of Finance, which publishes explanations (general enough) and journalists of the Legal Gazette, who have taken steps to obtain more precise answers. Unfortunately, the MF replies are still quite general.
What, therefore, is the situation of taxpayers who must, by the end of September, provide information on transfer prices and the fulfilment of obligations for 2018? – We will try to briefly present the following key facts and guidelines:
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New information on transfer prices (TP-R) – will be submitted once first for 2019 (tax year starting after 31 December 2018) year 2020. For the moment, we are not yet sure what the final shape and the folding mode will be. However, it is known that no matter what rigour the taxpayer chooses to document the year 2018, for a year 2018 by the end of September, it shall submit a CIT-TP or a PIT-TP in accordance with the conditions arising from the provisions in force until the end of the year. 2018
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Reporting of the CIT-TP/PIT-TP report, according to the position of the MF, taxpayers will be required to report simplified reports on the basis of the existing rules, regardless of whether the year 2018 decide to document according to “old” or “new” provisions, with: - for documentation of transactions carried out in the year 2018 According to the current rules, the situation is quite clear – we declare transactions the same as it was made for the year 2017, CIT-TP/PIT-TP is mandatory for taxable persons who have exceeded the income-cost criterion at the level of 10,000,000 EUR. - for documentation of transactions carried out in the year 2018 According to the ‘new’ rules, the MF expects taxpayers to draw up CIT-TP/PIT-TP in accordance with the provisions of the ‘old’ and here there may be some difficulties, as the application of the new provisions of the documentation obligation may be different from those resulting from the ‘old’ rules and in some cases it may appear that the taxable person is only carrying out transactions that are exempt from the documentation obligation in the light of the ‘new’ rules, then, in the absence of the documentation obligation, he will be required to examine the transaction in a way that allows the CIT-TP/PIT-TP report to be properly fulfilled.
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Declaration of the drawing-up of documents – in this case, also a lot depends on the taxpayer’s decision: - if the taxpayer has decided to document transactions carried out in the year 2018 by ‘old’ rules (current in years) 2017-2018, it makes a statement in its present form, i.e. a statement of the drawing up of documents sent in paper form; - if the taxpayer has decided to apply ‘new’ rules to document transactions carried out In 2018, the statement will be made in accordance with the provision Article 11m, and thus confirming not only the fact that the local tax documentation was drawn up, but also that the transactions covered by this documentation were carried out at market conditions.
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Information on transfer prices in CIT-8– declaration CIT-8 submitted for the tax year 2018 has not been adapted to those transitional provisions enabling taxable persons to document transactions in 2018. Questions about the documentation obligation (entry) 26 they refer to “old” provisions, i.e.
Article 9a(1)(1) CIT Act and do not contain any reference to ‘new’ regulations. Consequently, the taxable person who decided to document transactions carried out in 2018 According to the ‘new’ rules, there is no possibility of replying which is entirely in line with the existing factual and legal situation.
In reply to the question of what the taxpayer should do in this difficult situation, the MF merely pointed out that, in fact, declarations CIT-8 they have not been technically adapted to a solution allowed by transitional provisions, but from the perspective of the tax administration the problem is not so pressing as tax authorities will learn about the rigor chosen by the taxpayer on the basis of the submissions made on the preparation of the documentation.
Many taxpayers have already decided how to answer this question – some parties appear that since the question in the declaration refers to a provision in force until the end 2018, this by responding to them should be assessed from the perspective of these provisions, with second parties in situations where, according to the ‘old’ rules, the taxpayer was obliged to draw up documentation, but benefits from the regulations applicable from 2019 and on its basis there are no documentation obligations, that means that in the declaration CIT-8 may ‘legally’ indicate that he was required to draw up documentation and subsequently also not to draw up such documentation under the law.
It remains to be trusted that tax authorities will not take advantage of these differences in a way that is detrimental to taxpayers, which is still in force. Tax Ordinance should guarantee Article 2a Tax Ordinance, a according to government project Tax Ordinance, on 4 June 2019 has been directed to the parliamentary work, still to ensure it Article 18.
Source:
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Act dated 23 October 2018 the amendment of the Personal Income Tax Act, the Corporate Income Tax Act, the Act – Tax Ordinance and certain other laws;
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Act dated 15 February 1992 corporate income tax;
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Regulation of the Minister of Finance dated 21 December 2018 on transfer pricing information on corporate income tax;
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Act dated 29 August 1997 Tax Ordinance;
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www.mf.gov.pl ;
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www.gazetaprawna.pl
Author
Leszek Dutkiewicz Partner At Russell Bedford.
From 2011 related to Russell Bedford Poland. In years 2008 – 2011 worked for leading consulting companies (Ernst&Young, KPMG, BDO) providing tax advisory services. He specializes in tax and economic law, primarily in international tax law, tax proceedings, VAT and transaction prices. Author of a publication on tax, civil and international law issues. Lecturer in tax law training. He has legal education, in 2008 graduated from the Faculty of Law and Administration of the Jagiellonian University.