The Act on Corporate Income Tax (CIT) provisions concerning the preparation of transfer pricing documentation impose an obligation on companies to prepare and update it by the end of the ninth month following the end of the tax year. Therefore, the entities whose tax year corresponds to the calendar year are obliged to prepare transfer pricing documentation for 2018 until 30 September of the current year.
The obligation to prepare transfer pricing documentation concerns the taxpayers making settlements and conducting transactions with related parties, in particular with offshore entities, if the thresholds provided for in the CIT Act are exceeded.
In accordance with the provisions introducing new regulations, in force since 1 January 2019, transfer pricing documentation for 2018 may be prepared for the last time under Article 9a of the CIT Act, in force until 31 December 2018, or it may be prepared under the new provisions of Chapter 1a introduced on 1 January 2019.
This decision however requires careful analysis. In both cases, different statutory conditions are to be fulfilled, including exceeding the thresholds, the possibility of applying document simplifications or the exemptions from the documentation obligation for certain entities.
30 September 2019 is also the date of the deadline for submitting CIT-TP and filling the statements that transfer pricing documentation for 2018 have been drawn up. CIT-TP obligation concerns entities, the income and costs of which exceeded the equivalent of EUR 10 million in the previous tax year. The obligation also applies to companies making payments of receivables directly or indirectly to the entities having registered office in the territory applying harmful tax competition.
When discussing CIT-TP, it is also worth noting that the regulations, which came into force on 1 January 2019, introduced a new electronic TP-R form. However, TP-R will replace the existing CIT-TP form not earlier than in 2020. Therefore, only the taxpayers preparing transfer pricing documentation for 2019 will be obliged to submit an electronic TP-R form and will have to do so until 30 September 2020.
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