From January 1, 2019, thresholds have been raised, beyond which there is an obligation to prepare transfer pricing documentation. In addition, documentation obligations are based only on the criterion of the net value of a controlled transaction and are not dependent on the parties’ revenue / expenses.

Transaction limits for which local tax documentation should be prepared within 9 months of the end of the tax year are as follows:

• PLN 10,000,000 – for transactions of purchase/sale of tangible current assets (e.g., raw materials), fixed assets, obtaining/providing debt financing, surety or guarantee,
• PLN 2,000,000 – for transactions of purchase/sale of services, intangible assets, use / making available of fixed assets (including rental, lease), intangible assets (including licenses), assignment of income to a foreign establishment and other transactions
• PLN 100,000 – for transactions with entities with their residence, registered office or management in the territory or in a country applying harmful tax competition

The value of the transaction is determined without taking into account the tax on goods and services. The limit value has been expressed in Polish zlotys, and not in euros as before.

The rules for determining the value of a controlled transaction have been clarified. They are, respectively, as follows:

• loans and credit – the value of capital,
• bond issue – the nominal value,
• surety or guarantee – the guarantee value,
•  assignment of income (loss) to a foreign establishment – value of the assigned revenues or expenses, and
• other transactions - the actual value for a given controlled transaction.

Taxpayers belonging to capital groups whose consolidated revenues exceed PLN 200 million are obliged within 12 months from the end of the tax year to prepare group documentation. It is possible to use directly the documentation prepared by another entity from the group, including the documentation drawn up in English.

Exclusions

Exemptions from the documentary obligation concern, under certain conditions, among other, controlled transactions:

• concluded only by domestic entities,
• whose total value does not constitute income or tax deductible costs,
• in which the price was set in an unlimited tender,
• in the field of assigning income to a foreign establishment located on the territory of the Republic of Poland by foreign affiliated entities, if the provisions of double taxation treaties provide for such income to be taxed outside the Republic of Poland,
• covered by the decision on the transaction price agreement.

Note

The new regulations may already be applied to controlled transactions carried out in the year beginning after December 31, 2017 and before January 1, 2019. Then, the taxpayer will be exempted from documentary obligations under the previous regulations. The selection will cover all controlled transactions of the taxpayer carried out during this period.