Tax payers with controlled transactions with entities related to the year are increasingly applying to the Head of National Tax Administration for a prior price agreement (APA), as confirmed by the latest statistics published by the Ministry of Finance.
The published summary shows how much prior price agreements were concluded and contains detailed data on the APA, including what pricing methods taxpayers chose and what types of transactions were covered by the agreements.
Agreements concluded
From the beginning of APA to the day 30 June 2021 total 140 decisions on the conclusion of a prior price agreement.
What's interesting is that it's just first half-year 2021 issued 42 decisions (38 and 4 bilateral), compared to the previous full 2020 of total issue 18 The decision is a record result.
The following chart shows the number of agreements concluded each year since the beginning of the operation of the APA in Poland.
In addition to 30 June 2021 issued 56 other decisions, such as a decision to leave the application unexamined or a decision waiving the proceedings.
Available data also shows that per day 30 June 2021 is conducted together 408 APA procedures (378 concerning unilateral agreements, 29 bilateral and 1 of them multilateral).
APA release time
KAS notes that the deadline for examining applications has been renewed:
- on 31 December 2019 the duration of the application for a unilateral agreement was 10 months,
- on 31 March 2020 11 months,
- on 31 December 2020 Now. 12 months per day 30 June 2021 the average duration of the application was 17 months.
Those who are going to want to apply for the APA, but also those who have already done so, must be patient.
Transactions covered by agreements
The Ministry of Finance also published information on the subject matter of the prior price agreements concluded. Within 140 APA included selected pricing methods and types of transactions. This summary is discussed in the tables below.
Subject matter of the agreements concluded
sale of material goods to Poland
38
sale of tangible goods outside Poland
38
provision of services by a national entity
17
purchase of services by a national entity
32
the use of WN by the national operator
15
use of WN by a foreign entity
0
financial services
1
settlements involving the undertaking
2
Business restructuring
6
other
4
Methods for determining transfer prices in transactions subject to prior price agreements
Net transaction margin method
106
CUP method
18
method of profit sharing
8
cost plus method
6
other
2
method of price of sales
0
Let us remind that APA gives, among other things, the possibility to charge the tax costs for obtaining revenue for all expenditure incurred in carrying out the transaction, regardless of the limit laid down in Article 15e The CIT Act and also exempt from the obligation to draw up transfer pricing documentation for controlled transactions covered by the agreement.
In view of the above benefits resulting from previous price agreements, more decisions to conclude a prior price agreement should be expected in subsequent years.