The transfer pricing regulations in force since January 2019 have introduced numerous changes in this respect, such as for example:
- new documentation thresholds,
- the obligation for related entities to submit information on transfer prices TPR-C (legal persons) or TPR-P (natural persons) to the Head of the National Fiscal Administration,
- an obligation to make a statement confirming that the transfer pricing documentation has been prepared and that the transactions are carried out on arm’s length principle.
Taxpayers must therefore pay particular attention to the new regulations, while keeping in mind the statutory deadlines in this respect. These deadlines have been extended for most taxpayers due to the coronavirus pandemic and will expire on 31 December 2020.
Deadline for submitting of TPR-C lub TPR-P in the year 2020
The deadline for submitting this information TPR-C (TPR-P) and statements is generally passed for entities whose tax year is consistent with the calendar year of the day 30 September 2020 (in connection with the COVID-19 pandemic, the deadline was extended to 31 December 2020) For failure to comply with the deadlines for the performance of the obligations or for the certification in the submitted documents an untruth, the legislature provided for severe penalties. For this reason, it is important not only to complete the formalities within a certain period of time, but also to prepare the required documentation reliably.
Preparing the required data can be time consuming
According to the explanatory memorandum to the Act introducing the above mentioned obligations, the purpose of the introduced regulations is to obtain by the Head of the National Fiscal Administration detailed information on the conditions of controlled transactions concluded by taxpayers obliged to prepare local transfer pricing documentation. The collected data is to be used for statistical and economic analyses and analysis of the risk of income underestimation by taxpayers through non-market behaviour.
Additionally, it should be pointed out that the key element of information TPR is to properly supplement information on:
- the realized result on the transaction,
- data from prepared benchmark analysis,
- values of indicators such as achieved operating margin, gross profit margin, profitability of assets or profitability of equity.
Do not hesitate to prepare transfer pricing documentation
Taking into account the above, in order to meet the transfer pricing obligations imposed by the legislator in a timely and reliable manner, we suggest taking appropriate steps now. Taxpayers have gained additional time to complete the formalities, however, this does not mean that they can postpone the above topic to the last moment. Identifying transactions and then preparing the necessary documents and completing the formalities in accordance with the new regulations may prove to be time consuming.
Magdalena Stefaniak-Odziemska, tax advisor (PL)