Transfer Pricing – Reporting Obligations for 2023

We would like to remind you about the deadlines for the upcoming transfer pricing (“TP”) reporting obligations that fall on 2^nd December 2024. For the 2023, the taxpayers who conduct controlled transactions with related entities are required to:

• prepare transfer pricing documentation (Local File);
• submit information on transfer prices to the tax authorities (TPR-C form),
• sign the TP statement being an integral part of the TPR-C form submitted to the tax authorities – subject to a penal fiscal liability.

As in the previous years, the TPR-C form must be submitted to the appropriate tax office, on a template introduced by the Polish Ministry of Finance and submitted in accordance with the method established last year (xml file submitted via the Ministry of Finance’s website). Note that an integral part of the TPR-C form is the TP statement, i.e. the taxpayer’s statement that (i) the local transfer pricing documentation has been prepared in accordance with the actual state of facts and (ii) the transfer prices covered by the documentation have been established on terms that would be established between unrelated entities.

TPR-C Form

TPR-C form, including the TP declaration, is submitted by:

• the manager of the entity (in the case of a multi-person management body – by a designated person from that body),
• a person authorized to represent a foreign branch of an enterprise in Poland,
• an individual person in the case of a sole proprietorship.

According to the regulations, it is also possible to sign and submit the TPR-C form by a proxy who is a lawyer, legal advisor, tax advisor, or statutory auditor.

It is important to emphasize that the responsibility for the correctness of the taxpayer’s settlements with related entities is directly assigned to the members of the management board of the taxpayer through the obligation to sign and submit the TP statement. Therefore, we draw your attention to possible tax and penal fiscal sanctions that may materialize for the members of the management boards of the taxpayers obliged to report transfer prices for a given fiscal year who fail to comply.

Who Must Prepare Transfer Pricing Documentation?

Local transfer pricing documentation (Local File) is prepared for a controlled transaction of a homogeneous nature (transactions of one type), the value of which exceeds the following documentation thresholds in the tax year:

• PLN 10,000,000 – for goods and financial transactions,

• PLN 2,000,000 – for services and other transactions,

• PLN 2,500,000 – for financial transactions with entities from tax havens (whether related or unrelated),
• PLN 500,000 – for other non-financial transactions with entities from tax havens (whether related or unrelated).

Related entities are also required to prepare group transfer pricing documentation (Master File), which applies to entities consolidated using the full or proportional method, belonging to a group of related entities:

• For which consolidated financial statement is prepared, and
• Whose consolidated revenues exceeded PLN 200,000,000 or its equivalent in the previous financial year.

Reporting Deadlines

The deadlines for reporting transfer pricing documentation for 2023 are as follows:

• Local transfer pricing documentation (Local File) along with comparative analyses (benchmarks) – by the end of the tenth month after the end of the fiscal year,
• Transfer pricing information (TPR-C) – by the end of the eleventh month after the end of the fiscal year,
• Group transfer pricing documentation (Master File) – by the end of the twelfth month after the end of the fiscal year.

Example 1

Let’s analyze the case of XYZ Sp. z o.o. to outline its basic transfer pricing reporting obligations:

• The company’s fiscal year runs from January 1, 2023, to December 31, 2023;
• During this period, the company entered into a controlled transaction consisting in the purchase of goods from a foreign related entity for the amount of PLN 20,000,000;
• The company belongs to the XYZ capital group, whose consolidated revenues for 2022 amounted to PLN 150,000,000 (i.e. for the previous financial year of the group).

Considering the above, XYZ Sp. z o.o. is required to report local transfer pricing documentation for 2023. The deadlines for fulfilling these obligations are as follows:

• Local transfer pricing documentation (Local File) by October 31, 2024,
• Transfer pricing information (TPR-C) including the TP declaration by December 2, 2024 (November 30, 2024 falls on a Saturday, so the effective deadline for filing the TPR-C is December 2, 2024).

Example 2

Let’s analyze the case of AAA Sp. z o.o. to outline its basic transfer pricing reporting obligations:

• The company’s fiscal year runs from April 1, 2023, to March 31, 2024;
• During this period, the company entered into a controlled transaction involving the granting of a loan to a related foreign entity worth PLN 40,000,000;
• The company belongs to the XYZ group, whose consolidated revenues from April 1, 2022, to March 31, 2023, exceeded PLN 200,000,000 (i.e., for the previous fiscal year of the group).

Considering the above, AAA Sp. z o.o. is required to prepare transfer pricing documentation for the fiscal year 2023 (Local File and Master File). The deadlines for fulfilling these obligations are as follows:

• Local transfer pricing documentation (Local File) by January 31, 2025,
• Transfer pricing information (TPR-C) including the TP declaration by February 28, 2025,
• Group transfer pricing documentation (Master File) by March 31, 2025.

Complicated? Not with Arena Advisory

Our Arena Advisory Transfer Pricing and Valuations Team can help you analyze transfer pricing obligations, including assessing the possibility of using exemptions or simplifications, as well as prepare the necessary documentation, analyses and a ready-to-submit TPR-C forms.

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