The subject matter of transfer pricing in itself is not simple. The legislator does not facilitate the task of meeting the requirements of the laws. Twice in the past three years changed the regulations in this area – and they were not cosmetic amendments. We keep our hands on these changes and help.
The major changes made by the Ministry of Finance include, inter alia, issues of documentation obligation (whose concerns is how to calculate transaction thresholds, after which the transaction becomes a ‘material transaction’) and issues of tax documentation content (‘local’ and ‘group’). In addition, there was a problem of new terms – if before 2017 there was no precise deadline for drawing up tax records (it was only necessary to keep in mind a seven-day time limit for the submission of documents in the event of a request from the tax authority – which is also in force today), but in accordance with the new rules they should be drawn up to the end ninth one month after the end of the tax year (group documentation – to the end twelfth one month after the end of the tax year).
Consequences for failing to draw up tax records
Before the latest amendment of the rules (i.e. to the end 2018) The most severe penalty was the sanctioning tax rate – 50%. The difference between the income declared by the taxpayer and the tax authorities was taxed.
From 2019 This sanction rate has been repealed but a new solution has been introduced, as described in Chapter 6a Tax Ordinance – Additional tax liability.
Namely, where a transfer pricing decision is taken, the authority may impose an additional obligation of 10% the sum of the tax loss unduly shown or overestimated and not fully or in part of the taxable income in respect of that decision.
But it's not over. This penalty rate may be doubled if:
- • the basis for establishing an additional tax liability exceeds 15,000,000 PLN – in excess of that amount,
- • the taxpayer has not submitted the tax documentation to the tax authority.
How can we avoid these inconveniences? Best contact Russell Bedford Poland Sp. z o.o. Our experienced team will answer your questions, help in identifying transactions that are subject to documentation obligation, prepare documentation. The tax advisory department RBP has many years of experience in providing these services.