Poland

Transfer Pricing 

Polish tax regulations oblige taxpayers to establish the terms and conditions of pricing as well as other provisions of related party transactions and pricing in particular, at the arm’s length level. Violation of this rule empowers the tax authorities to estimate the arm’s length value of income and determine the proper amount of tax liability.

Jacek Bajger

Jacek Bajger

Partner, Tax, Head of Transfer Pricing, KPMG in Poland

+48 (22) 528 11 73

Monika Palmowska

Director, Tax, KPMG in Poland

+48 22 528 11 65

 

Our services

Analysis of transfer pricing risks

Risk management in transfer pricing consists of selecting adequate instruments relevant to the materiality of risk in transfer pricing, which the enterprise is exposed to. Effective risk management requires identifying the risk areas as well as quantifying the risk, and afterwards proper application of procedures that enable the reduction or an elimination of the risk exposure.

 

Advance Pricing Agreements (APA)

Assistance and advisory during the negotiation process with the Minister of Finance, including: an assessment of the validity and the chances of reaching an agreement, establishing an effective negotiating strategy, developing arguments in support of the proposed arrangements, and preparation of analyses essential in the negotiation process.

 

Assistance and representation during all the stages of the negotiation process, from the prefiling meetings, to the preparation of documentation and providing representation throughout the entire negotiation process, as well as in the execution phase of the APA.

 

Transfer pricing documentation

Preparation, updating or analysis of the mandatory documentation prepared by the taxpayer for transactions performed with related entities in accordance with Article 9a of the Polish Corporate Income Tax Act.

 

Benchmarking study

Benchmarking studies are performed in order to verify the prices and margins that are applied by related entities. Verification is aimed at checking if the controlled transactions’ conditions conform to the conditions of comparable transactions entered by non-affiliated entities.  Benchmarking studies are a necessary element of argumentation confirming that the prices established by the taxpayer are in the range of the market prices.

 

Planning of the transfer pricing policy and intra-group settlements

Flexibility in the planning of transfer pricing policies, in order to achieve the best possible settlement between related parties, in accordance with the tax laws.  Drawing up the settlement rules and principles (such as the calculation of the level of prices/margins) that meet specific economic goals.  Drafting and reviewing contracts entered by related entities with a particular focus on transfer pricing rules.

 

Allocation of profits between the permanent establishment and the parent unit and other related entities

Identification of the transaction flows between the permanent establishment and the parent unit. Analysis of market level of prices/margins set by the permanent establishment in the transactions with related parties, and in the internal transaction flows between the permanent establishment and its parent unit.

 

Assistance during a tax audit

Representation and assistance during the audit.  Preparation of appropriate arguments, assistance in conducting studies and gathering documentation supporting the taxpayer’s position regarding transfer pricing.

 

Procedures aimed at eliminating double taxation

Support in the proceedings under the double tax treaties and the convention on the elimination of double taxation. Analysis of the possibility of profit adjustment. Assistance during the procedure for the preparation of applications, representation before the authorities, the preparation of analyses, monitoring the procedures.

 

Training

Training in transfer pricing includes pricing methodology, the preparation and process of updating documentation in accordance with Article 9a of the Polish Corporate Income Tax Act as well as preparation for the tax audit.

 


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