On 12 April 2018 We participated in first Transfer pricing forum organized by the Ministry of Finance. Forum to be one with tools to exchange views between taxpayers and the tax administration.
first edition gathered about 200 persons – transfer pricing experts and business representatives. The forum's theme was benchmarking analyses. Representatives of the Transfer Pricing Department discussed ongoing work on introducing JTPF recommendations in benchmarking practice in the field of benchmarking. The MF representatives also provided practical guidance on how taxpayers should seek comparability for their transactions from their point of view.
It is also appropriate to assess positively the announcements of the representatives of the Ministry, according to which the activities of the Ministry, together with the Department of Transfer Prices, are to focus on identifying and preventing obvious cases of transfer of income outside Poland, rather than waiting for all taxpayers to produce extensive documentation and costly, labor-intensive analyses.
Using online surveys filled out in real time by participants, an exchange of views on issues related to which the most practical doubts arise.
Several important requests were presented from participants, mostly concerning the need to de formalise documentation/analytical requirements and to clarify the extent of information that may be expected by the tax administration.
Among the comments submitted were:
- • the request to exclude intra-national transactions from mandatory documentation;
- • the practical application of knowledge, transfer pricing know-how at the level of current tax controls;
- • the problem of controlling cashpooling as a potentially risky transfer pricing transaction;
- • difficulties in practical application of the requirement to draw up comparative analyses based on comparative data on the Polish market;
- • difficulties in obtaining comparative data for financial and intangible transactions;
- • lack of clear expectations for the "description of compliance with the conditions which independent operators would set"
The Forum's deliberations were completed by a summary of the work currently being carried out by the Transfer Pricing Department on the implementation of the simplified prior price agreement (uAPA).
The representatives of the MF indicated that UAPA is to fulfil the same objective as the basic APA, i.e. confirmation of the methodology and the imposition or key. The simplified procedure for obtaining UAPA is to be based on:
- • taxpayer statements (functional profile);
- • a standardised proposal (description part, financial data, indicators);
- • actual data (no financial projections, no critical conditions)
The envisaged duration is 3 years, the fee will be at a single level, regardless of the type of transaction.
The proposal will be covered by tax secrecy, but the MF provides for the publication of annual statistics on APA and uAPA issued containing information not only a number but also information on the solutions which were the subject of the proposals (at some level with confidentiality).
It is also appropriate to assess positively the announcements of the representatives of the Ministry, according to which the activities of the Ministry, together with the Department of Transfer Prices, are to focus on identifying and preventing obvious cases of transfer of income outside Poland, rather than waiting for all taxpayers to produce extensive documentation and costly, labor-intensive analyses.
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.