Although transfer pricing – including transfer pricing adjustments – has for years been one of the most intensively analysed tax areas, recent developments at both EU and domestic levels clearly demonstrate that the topic is far from settled. On the contrary, it continues to generate increasingly complex risks at the intersection of taxes and customs, particularly visible in the context of year-end closing and the upcoming e-invoicing obligations.

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From a transfer pricing perspective, this trend is particularly significant. TP adjustments are increasingly moving beyond being a purely “technical alignment of profitability” for CIT purposes. In practice, they are becoming a trigger point for the broader tax ecosystem, including VAT, WHT, investment relief schemes such as the Polish Investment Zone (PSI), customs, and, more recently, the National e-Invoicing System (KSeF). This means that decisions often taken only at the year-end stage may have a tangible impact on the overall tax security of multinational groups.

A clear example is the Opinion of Advocate General Juliane Kokott of 15 January 2026 in case C-603/24 Stellantis Portugal S.A., which once again reignites the debate on whether and when transfer pricing adjustments should affect VAT settlements.

Stellantis Portugal – Why is this question once again a turning point?

We have already discussed the preliminary question itself in our previous publications. However, it is worth recalling the context:

  • the TP adjustment was made ex post, after year-end (as part of internal profit allocation),
  • it resulted from the transfer pricing policy and had a compensatory nature,
  • it was linked to transactions subject to VAT.

The key question therefore remains familiar, yet still lacks a single safe answer: does such an adjustment affect the VAT taxable base and, if so, how should it be documented and settled?

More nuance, less automatism

The Opinion of Advocate General Kokott – similarly to many earlier VAT rulings – attempts to remove the illusion that there is a single “algorithm” for settling TP adjustments for VAT purposes.

The following aspects are particularly emphasised:

  • the mere existence of a TP adjustment does not automatically imply a VAT adjustment,
  • the direct link between the adjustment and specific supplies of goods or services is crucial,
  • it is necessary to analyse whether the original price was only provisional or economically final.

For finance teams, this creates a very practical challenge. TP adjustments are no longer solely about ensuring arm’s length profitability. Instead, they increasingly represent events requiring consistent tax and accounting justification. A lack of such consistency is currently one of the key sources of risk during tax audits, particularly where TP documentation, invoicing practices and VAT settlements present inconsistent narratives.

While this approach aligns with the recent case law of the Court of Justice of the European Union (CJEU), it does not provide taxpayers with straightforward operational guidance – and therefore generates uncertainty.

TP Adjustments and VAT – a recurring theme

In recent years, the CJEU has repeatedly addressed TP adjustments and their VAT implications (see our previous blog publications). The common denominator across these cases includes:

  • case-by-case analysis,
  • strong focus on economic reality,
  • rejection of the assumption that TP adjustments automatically constitute corrections to original pricing or additional consideration.

For multinational groups, this means that every TP settlement model is potentially open to defence or challenge – not only from a VAT perspective but also for CIT and WHT purposes.

Polish perspective: The Provincial Administrative Court in Rzeszów and the “Dividend-Like” approach to head office charges

Against this background, particular attention should be paid to the still non-final judgment of the Provincial Administrative Court in Rzeszów dated 24 October 2024 (case I SA/Rz 380/24), in which the court:

  • challenged the deductibility of services acquired from the head office due to insufficient evidence confirming their actual performance,
  • reclassified these charges as, in substance, a form of profit transfer (economic dividend) rather than genuine service remuneration.

If such a bold line of reasoning were to be maintained in the long term, it could create risks not only in VAT (lack of supply / fictitious invoices), but also in:

  • CIT (tax deductibility of costs),
  • WHT (potential dividend classification),
  • and indirectly in transfer pricing documentation.

This demonstrates that transfer pricing is no longer limited to compliance with Article 11k of the Polish CIT Act. Instead, it increasingly represents a central axis of multi-tax disputes.

From a TP practice perspective, this constitutes a clear warning signal. Where intercompany settlement models lack strong economic and operational justification, tax authorities are increasingly looking beyond formal contractual wording or accounting descriptions. Instead, they focus on which functions are actually performed, where value is created, and how benefits and risks are effectively allocated.

Such a “substance over form” approach may lead not only to challenges regarding the arm’s length nature of TP settlements but also to reclassification of payments for VAT and WHT purposes, and in extreme cases, their treatment as profit distribution.

This approach is supported both by the OECD Transfer Pricing Guidelines – particularly the concept of accurate delineation of the transaction – as well as by established CJEU case law and evolving administrative court doctrine emphasising the economic substance of transactions.

KSeF and TP Adjustments

Another important element is the introduction of the Polish National e-Invoicing System (KSeF), which forces taxpayers to address practical operational questions, including:

  • whether a TP adjustment requires a correcting invoice or an additional invoice,
  • when such an invoice should be issued and recognised for VAT purposes,
  • how such settlements should be presented within the KSeF structure (e.g. aggregated vs single-line reporting).

In the near future, KSeF will make these decisions fully transparent and auditable.

In this environment, transfer pricing is no longer a purely documentation-based exercise. It is becoming an integral part of day-to-day accounting processes. TP models must therefore address not only arm’s length compliance but also operational feasibility – both in financial systems and within KSeF reporting.

Year-End 2025 – the last call for risk review

For years, we have emphasised – including during our webinar “Year-End Tax Closing 2022 in VAT and Beyond” – that year-end is the optimal moment to review TP adjustments holistically, including:

  • VAT,
  • CIT / WHT / investment incentive Settlements (for more details, see our blog),
  • TP documentation,
  • cash flow implications, including customs aspects (for more details, see our blog),
  • compliance obligations, now also including KSeF (for more details, see our blog),

The Advocate General’s opinion in Stellantis demonstrates that even well-designed settlement models may be challenged if they lack a consistent tax narrative.

The final CJEU judgment in case C-603/24 is still pending. However, experience suggests that it will not introduce a single universal rule. Instead, it will likely provide further guidance – and additional areas of risk.

From a transfer pricing perspective, it is increasingly evident that safe year-end closing does not begin in December. It begins much earlier – at the stage of designing intercompany settlement models. Alignment between TP, VAT and CIT is no longer an added value but a prerequisite for limiting tax and operational risks.

In response to these challenges, a comprehensive approach to transfer pricing is gaining importance. This includes not only TP documentation but also TP adjustment audits, pre-year-end reviews of settlement models, designing tax-secure and operationally feasible adjustment mechanisms, including those compatible with KSeF.

Therefore, businesses should:

👉 review TP-VAT-CIT settlement models

👉 train teams actively involved in intercompany settlements and pricing decisions (not only tax and finance departments)

👉 test TP models not only for arm’s length compliance but also for operational and evidentiary robustness

👉 take decisions regarding TP adjustments before they become a year-end issue

👉 mitigate risks proactively – before they are identified by tax authorities or courts