The Ministry of Finance has published further explanations – this time on the submission of statements of tax documentation. The topic is as up to date as at the end of September 2019 for the majority of taxable persons, the time limit for submitting such a declaration of drawing up a dossier for the year is up 2018.
The subject of making statements may be a little confusing, as it is possible to make statements on 2018 by two various legal regimes. According to the provisions of the law amending the rules on transfer pricing, taxpayers can choose the so-called "new rules" to document transactions carried out in 2018[1]. The decision in this respect remains entirely with the taxpayer.
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The taxpayer can benefit from the choice of new rules primarily in terms of reducing the scope of transactions to be documented, which is mainly due to new higher limits and the possibility of exempting from the obligation to document domestic transactions in certain cases. However, taxpayers who decided to choose new rules for 2018 they are also required to make a statement under the new rules. This means that, in a statement to the tax authorities, the taxpayer confirms that:
- •
- draw up local tax records;
- •
- the transfer prices of the controlled transactions covered by the local transfer pricing documentation shall be determined under conditions which would be determined by unrelated parties.
Compared to the rules applicable to 31 December 2018 the content of the statement has been extended to this second the point at which the taxpayer is to confirm that controlled transactions with related undertakings have been carried out at market conditions.
The submission of such an unequivocal declaration makes the persons required to sign the statement particularly cautious, as they are often very careful not to know whether the transactions are in 100% under market conditions, and in particular whether such an assessment is confirmed by the tax authority in the event of a check.
Therefore, we are aware of cases where taxpayers decide to document transactions carried out in 2018 on ‘old’ rules (although this involves more work) only because of the possibility of making a statement in the previous form, in which it is required to confirm that the tax documentation (local) has been prepared.
For those of the taxpayers who have decided to document transactions with 2018 on a new basis, the MF has developed instructions for making new declarations.
It states that, in accordance with the current provisions, a declaration may be made only by electronic means (statement according to the rules applicable to the end of the 2018 may be submitted electronically or by paper).
The provisions only specify the required content of the statement (the points indicated above) there is no official pattern, but at the address indicated, the MF has published an example of a pattern that taxpayers can use.
The statement should be signed by the person(s) acting as the head of the unit within the meaning of the Accounting Act.
Provisions in force since January 2019 it is clearly stated that the obligation to sign the statement lies with the head of the unit and cannot replace it in this respect (regardless of the form of power of attorney, this also applies to the attorney).
Under the provisions in force to the end 2018 doubts arose as to the possibility of different persons signing the statement, but in practice signing it by the head of the unit is the safest solution.
The explanations of the MF provide a number of guidance on the technical aspects of the electronic signature of the statement. In conclusion, in view of the questions we often receive from taxpayers, we explain that the statement must be made only in respect of transactions subject to a documentation obligation.
Therefore, if related transactions are carried out in your units which do not meet the conditions to be covered by the documentation obligation, or fulfil them, but you benefit from the exemption from the documentation obligation, these transactions do not require a declaration to be prepared.
The statement (or any other document) should not indicate the list of transactions to which the tax documentation was drawn up or explain whether you decided to apply the new rules to document the year 2018.
The instructions are available at:
- https://www.podatki.gov.pl/ceny-transferowe/wyjasnienia/oswiadczenie-o-sporzadzeniu-lokalnej-dokumentacji-cen-transferowych-najczesciej-zadawane-pytania-i-wzor-oswiadczenia/
- 1 — Article 44(2) Act dated 23 October 2018 the amendment of the Personal Income Tax Act, the Corporate Income Tax Act, the Act – Tax Ordinance and some other laws (Journal of Laws of 2018, item 2193 as amended)
Author: Leszek Dutkiewicz, partner Russell Bedford Poland. Associated with the company from 2011. Director of RBP office in Katowice. 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.