Transfer pricing documentation should reflect the actual course of intragroup transactions: who performs functions, bears risks and uses assets. The TPR return must subsequently be reconciled with this description.
We help identify obligations, prepare the Local File and transfer pricing analysis, reconcile the TPR return and defend the settlement model adopted in the event of an audit.
Transfer pricing
The TPR information return, which includes a declaration that the documentation reflects the actual facts and that the prices are at arm’s length, is signed by the head of the entity. In a company, this is usually a designated management board member. Yet the documentation is often prepared by the accounting department or the group’s head office, using a template that no one at the Polish company has checked against the way the transaction actually took place.
Transfer prices are the terms on which related parties settle transactions with each other. They should reflect the terms that unrelated parties would agree, and the documentation should demonstrate that the transactions comply with this principle.
When to address transfer pricing
It is worth putting transfer pricing arrangements in order when the group’s settlement model changes. Waiting until a request from the authorities arrives leaves little time to check the obligations and correct the arrangements before the fourteen-day deadline expires.
- the group has transactions with related parties and no one has checked whether they exceed the documentation thresholds
- the documentation is prepared by the accounting department or a head office abroad using a generic template
- the group’s settlement model has changed: there is a new licence agreement, loan or recharge of management costs
- the company is making a loss while applying a fixed margin in its transactions with a related party
- no one knows when the benchmarking analysis was last updated
- a request to submit documentation or a notice of an audit in this area has arrived
An outdated benchmarking analysis is one of the first things to check. The market may change faster than the document describing it.
Who is required to prepare documentation
The obligation arises when the value of a homogeneous controlled transaction in a tax year exceeds the threshold set out in Article 11k(2) of the Polish Corporate Income Tax Act (CIT Act). The thresholds are determined separately for each homogeneous transaction and for its cost and revenue sides.
| Type of transaction | Documentation threshold |
|---|---|
| Goods | PLN 10 million |
| Financial | PLN 10 million |
| Services | PLN 2 million |
| Other | PLN 2 million |
| With an entity in a country or territory practising harmful tax competition: financial | PLN 2.5 million |
| With such an entity: other than financial | PLN 500,000 |
2026 deadlines for the 2025 tax year
The dates below apply to entities whose tax year coincides with the calendar year. Each obligation has a separate deadline.
| Obligation | Legal basis | Deadline |
|---|---|---|
| Local transfer pricing documentation (Local File) | Article 11k of the CIT Act | 2 November 2026 |
| TPR-C or TPR-P information return | Article 11t of the CIT Act | 30 November 2026 |
| Group transfer pricing documentation (Master File) | Article 11p of the CIT Act | 31 December 2026 |
In subsequent years, as a general rule, the Local File must be prepared by the end of the tenth month following the end of the tax year, the TPR return must be filed by the end of the eleventh month, and the Master File must be prepared by the end of the twelfth month. The actual date may move if the last day of the deadline falls on a Saturday or a public holiday.
The Master File must be attached by entities subject to the Local File obligation whose financial statements are consolidated using the full or proportional method and which belong to a group with consolidated revenue exceeding PLN 200 million in the preceding financial year.
The TPR information return is a report to the tax administration. The data in the form are used for risk analysis, so discrepancies between the TPR return, the documentation and the financial statements may lead to further questions.
When the obligation does not arise and when documentation can be simpler
Article 11n of the CIT Act provides exemptions covering, among other things, certain domestic transactions. Separate safe harbour simplifications apply to specified financial transactions and low value-adding services. Each has its own conditions, so an assessment requires checking the particular transaction and the circumstances of both parties.
Under Article 11q(3a) of the CIT Act, local documentation prepared for controlled transactions entered into by a micro-enterprise or a small enterprise may omit a benchmarking analysis or a compliance analysis. Enterprise status is assessed on the basis of the preceding tax year.
The simplification concerns the contents of the documentation; it does not automatically remove the obligation to prepare it. Checking whether it is available often makes a significant difference to the scope of the project.
Transfer pricing documentation
Let’s look at the arrangements in your group
Tell us what transactions take place between related parties and who currently prepares the documentation. During our first conversation, we will establish where an obligation may arise, which risks need checking and what the scope of the work should be.
Jarosław Włoch combines documentation preparation with tax dispute strategy. Aleksandra Nocuń-Galas works, among other areas, on transfer pricing in structures involving a foundation, an operating company and other related parties.
Benchmarking analysis and its updates
The Local File includes a description of the entity, a description of the transaction with an analysis of functions, risks and assets, a transfer pricing analysis and financial information. A benchmarking analysis or a compliance analysis shows the data against which the terms agreed between related parties have been assessed.
Under Article 11r of the CIT Act, the analysis must be updated at least every three years. If a change in the economic environment significantly affects the result, a review should take place earlier, in the year of that change.
Risks for the company and for its management board
Risk operates at several levels: the company’s tax position, an additional tax liability and the liability of the individuals signing the TPR return or handling financial matters.
In a transfer pricing decision, the additional tax liability is generally 10% of the total overstated loss and undeclared income. The rate may be doubled, including for the portion of the assessment base exceeding PLN 15 million or the portion relating to a transaction for which documentation has not been submitted. Where these conditions occur together, the rate may be tripled. Incomplete documentation may be supplemented in full within the period set by the authority, which may not exceed 14 days; this excludes the increase arising solely from failure to submit it.
Fiscal criminal liability relating to TPR and documentation obligations must be considered separately. The scope of liability depends on the individual’s role and the particular breach.
The most far-reaching consequence may, however, concern the transaction model itself. Under Article 11c(4) of the CIT Act, the authority may assess income by disregarding the controlled transaction or by reference to an appropriate alternative transaction if it concludes that unrelated parties acting with economic rationality would not have entered into it in that form.
Difficulty in verifying the price, or the absence of comparable transactions, cannot be the sole basis for such a determination.
Transfer pricing during an audit
Documentation requested by the authority must be submitted within 14 days of service of the request. It is difficult to reconstruct the entire course of a transaction reliably within that time, so what matters is the documentation prepared beforehand and whether it reflects the actual settlement model.
Documentation prepared with a possible audit in mind explains the choice of method, the circumstances in which the transaction was entered into, the functions and risks of the parties, and the options realistically available at the time. A document template alone cannot replace information about how the group actually operates.
We combine documentation preparation with subsequent defence of the position taken. If the matter becomes a dispute, we continue to handle it as part of our tax audits and disputes practice.
What Tax Legal Partner’s support covers
- identifying which intragroup transactions require documentation and to what extent
- local transfer pricing documentation, including an analysis of functions, risks and assets
- benchmarking analyses and compliance analyses, and their periodic updates
- group documentation for entities subject to that obligation
- the group’s transfer pricing policy and the rules for applying it in day-to-day settlements
- reviewing and preparing TPR information returns and reconciling them with the documentation
- assessing the effects of a planned change to the settlement model before it is introduced
- representation in transfer pricing audits and proceedings, and before the administrative courts
For cross-border transactions, we combine this scope with our international tax law practice.
How we work together
Mapping the transactions. We establish who transacts with whom in the group and on what terms. This stage may reveal transactions not previously considered for documentation purposes: interest-free loans, guarantees provided free of charge or the use of a trademark without a licence agreement.
Documentation and analysis. We prepare the documentation and transfer pricing analysis, describing the method adopted and the reasons for choosing it. We identify weak points before an audit, rather than only in response to a request.
Maintenance and defence. We agree the rules for updates, reconcile the TPR return with the documentation and, if the matter reaches the authorities, represent you in the proceedings.
Questions we are asked most often
Not always. Article 11n of the CIT Act provides an exemption for certain domestic transactions where the statutory conditions are met. The particular transaction and the tax position of both parties must be checked.
PLN 10 million for transactions involving goods and financial transactions, and PLN 2 million for services and other transactions. For direct transactions with an entity in a country or territory practising harmful tax competition, the thresholds are PLN 2.5 million for a financial transaction and PLN 500,000 for other transactions.
At least every three years. If a change in the economic environment significantly affects the analysis, it should be updated earlier, in the year of that change.
Fourteen days from service of the request. This deadline applies to documentation that the taxpayer was required to prepare beforehand.
As a general rule, yes, if it is entered into between related parties. That alone does not, however, determine whether documentation is required. The value of the transaction, the applicable threshold and any exemptions also matter. Whether the loan terms are at arm’s length must be assessed separately.
Yes. If the authority concludes that unrelated parties acting with economic rationality would not have entered into the transaction, or would have entered into a different one, it may assess income by disregarding the controlled transaction or by reference to an appropriate alternative transaction. Difficulty in verifying the price or the absence of comparable transactions cannot be the sole basis for such a determination.
Have a question?
Let’s first establish what the obligation is
Briefly describe the matter. We will check whether full documentation is needed or whether it is enough to verify the obligation itself.
Partner | Attorney-at-law | Licensed tax advisor
tel: +48 509 485 709