Under the Act of 7 October 2022 amending the Corporate Income Tax Act and certain other acts and the Ordinance of the Minister of Finance on corporate income tax transfer pricing information of 29 August 2022, and as a result of the cancellation of the epidemic emergency in Poland:
Changes to the deadlines and preparation of local transfer pricing documentation mean that in 2023:
Moreover, there is also a requirement introduced:
Additionally, the legislator has moved the reporting of re-invoices to a separate category 'F'. Taxpayers with the status of a small- or micro-entrepreneur, on the other hand, gained the possibility to indicate their status. If they demonstrate that they meet certain conditions, they will not be subject to the requirement to provide details of the transfer pricing information used and the methods for verifying it.
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Under the legislative changes implemented, the regulations on indirect haven transactions have been lifted. However, the regulations for direct haven transactions are still in force. What has changed is the amount of the documentation thresholds.
For controlled transactions and transactions other than controlled transactions with a haven entity or a foreign permanent establishment located in a tax haven, the documentation thresholds amount to:
The thresholds apply to transactions for 2021 and 2022. It should be noted that previously the limit was PLN 100 000, regardless of the type of transaction.
With retroactive effect from 1 January 2021, the provision repealing the documentation obligation in relation to indirect haven transactions is in force. The lack of obligation covers transactions initiated and not completed before 1 January 2021, and therefore also applies to reporting for 2022.
In 2023, the certification for documentation that is not in accordance with the actual state, the failure to prepare local transfer pricing documentation, the preparation of documentation after the deadline or the failure to include group documentation, the so-called Master File, is punishable by a fine of 240 to 720 daily rates.
Please note that the daily rate is set against the minimum remuneration in Poland. Due to the fact that the minimum remuneration for work as from 1 July 2023 amounts to PLN 3 600, the maximum daily rate is up to PLN 48 000. Learn more: Tax crimes and offences - fines in 2023 go up sharply
The maximum fine for not preparing local transfer pricing documentation can therefore be as high as PLN 34 million. It is therefore advisable to start preparing for transfer pricing reporting obligations much earlier and to take advantage of expert assistance to avoid unnecessary risks.
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