Wojciech Marszałkowski | In Principle

In the early years of my legal career, I came across a tax interpretation requested by a library wishing to determine the tax consequences of forgiving fines for overdue books. That was when I heard for the first time the advocacy rule of avoiding “the question too far.”

Along with the provisions allowing for establishment of a family foundation, entirely new tax provisions are being introduced, with attractive rules for taxation of asset transfers and foundation activities, but also a slightly too varied patchwork of tax rates.

In this episode, Wojciech Marszałkowski explains transfer pricing compliance obligations. What is the arm’s-length principle? When do taxpayers have to prepare documentation describing most cross-border transactions? What are the peculiarities of the Polish transfer pricing regulations? What are the rules regarding indirect transactions with tax havens? When can taxpayers be required to prepare a “master file”?

A revised bill to amend tax regulations as part of the “Polish Deal” has been submitted to the parliament. How do the proposals involving transfer pricing look now?

Transfer pricing regulations have been included in the package of proposed changes to tax law implementing the political programme known as the Polish Deal. Some of these changes respond to market expectations and deserve applause. Others will complicate taxpayers’ lives. Here we examine the proposed solutions.

A comprehensive overhaul of Polish tax law is expected. The proposed changes would implement the Law & Justice government’s programme known as the “Polish Deal.” Some of these changes are intended to make the tax system more attractive to new taxpayers. Others are designed to encourage taxpayers who have used optimisation schemes in the past to put their tax affairs in order.

Tax strategy: A step toward transparency or just more red tape?
Despite the difficulties this year, Polish lawmakers did not forget about their annual update of tax laws. Under the recently adopted regulations, the Treasury will seek to learn more about taxpayers by requiring them to draft, file and even publish a tax strategy. Is this a move toward transparency for the country’s largest companies, or another unnecessary formality?

Transactions between related parties at a value above statutory thresholds must be identified in local transfer pricing documentation, but the regulations provide for a number of exceptions.

Although the definition of a “controlled transaction” has been introduced into the PIT Act and the CIT Act, taxpayers (and lawmakers) still have doubts which events require preparation of transfer pricing documentation. Today, we write about transfer pricing documentation in the case of contributions to share capital, share redemptions, and dividends.

Adjustments of transfer prices have generated a lot of uncertainty among taxpayers for a long time, as evidenced by the large number of individual tax interpretations issued in this area. Due to the change in regulations, and because the right to make an adjustment is affected by numerous factors, taxpayers seek interpretations from the revenue administration even when the facts are not very complicated.

“Shield 4.0” extends the deadlines for all obligated entities to file transfer pricing information (TPR), declarations on preparation of local transfer pricing documentation, and enclosures of group transfer pricing documentation. The earlier regulations extended the deadlines only for selected taxpayers.

Recently we wrote about the planned implementation of the Cooperation Programme, under which selected taxpayers would be given the opportunity to cooperate with the head of the National Treasury Administration on a permanent basis. This cooperation would, among other things, enables taxpayers to reach decisions on tax strategy in consultation with the authority competent for verifying the correctness of the taxpayer’s settlements. Until 26 May 2020, taxpayers may submit comments and suggestions to the Ministry of Finance on selected documents relevant to the programme.