In Poland, transfer pricing regulations impose strict documentation and reporting obligations on companies engaging in transactions with affiliated entities. Failure to comply with these obligations can result in severe financial penalties. Understanding the regulatory framework and meeting deadlines is crucial to ensuring compliance and minimizing financial risks associated with transfer pricing regulations. Below, we outline the key requirements for businesses operating in Poland.

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Which transactions are subject to Transfer Pricing Documentation?

According to art.11k of the Polish Corporate Income Tax (CIT) Act, transfer pricing documentation is required for transactions between affiliated entities that exceed the following thresholds:

  • PLN 10,000,000 – for the sale or purchase of goods;
  • PLN 10,000,000 – for financial transactions;
  • PLN 2,000,000 – for service transactions and other types of transactions.

For transactions involving entities located in jurisdictions recognized as engaging in harmful tax competition (i.e., tax havens), the documentation thresholds are significantly lower:

  • PLN 2,500,000 – for financial transactions;
  • PLN 500,000 – for transactions other than financial transactions.

Obligations for transactions exceeding the documentation thresholds

If a company meets the above mentioned conditions, it must:

  1. Prepare Local Transfer Pricing Documentation (Local File) in Polish by the end of the tenth month following the end of the tax year (unless the given transaction qualifies for exemptions specified in Polish regulations);
  2. Prepare a Transfer Pricing Analysis (as part of Local File) confirming that the transaction adheres to the arm’s length principle (unless the company qualifies for an exemption under Polish regulations);
  3. Submit the TPR-C Form (in .XML format) to Polish tax authorities by the end of the eleventh month following the tax year.

Additionally, companies belonging to groups with a consolidated turnover exceeding PLN 200 million in the previous fiscal year must prepare a Master File, which provides a broader overview of the group’s transfer pricing policies. The deadline for attaching the Master File to the Local File is 12 months after the end of the tax year.

Transfer Pricing sanctions

In recent years, tax authorities have significantly enhanced their capabilities in detecting transfer pricing irregularities. With the increasing availability of digital tools, automated data analysis, and cross-border cooperation, tax administrations are now more efficient in identifying high-risk taxpayers. One of the key instruments in this process is the Transfer Pricing Information (TPR-C) form, which provides authorities with detailed insights into reported transactions and allows them to flag inconsistencies more effectively.

Below is an overview of the key consequences that taxpayers may face for non-compliance with transfer pricing obligations.

1. Additional tax liabilities

Failing to meet transfer pricing obligations can lead to severe financial consequences. If tax authorities determine that a taxpayer has not adhered to the arm’s length principle, they may impose adjustments to taxable income and additional tax liabilities.

The difference between the taxpayer-determined income and the adjusted taxable profits is subject to an additional tax rate:

  • Standard 19% corporate tax rate applies to reassessed taxable income.
  • An additional 10% penalty tax rate may be imposed on the reassessed income.

In certain cases, the penalty tax rate may increase:

  • 20% - in the event of failure to submit transfer pricing documentation (or submission of incomplete documentation) or if the basis of the additional tax liability exceeds the amount of PLN 15 million - in respect of the excess over that amount;
  • 30 % - in the event of failure to submit transfer pricing documentation when, at the same time, the value of the basis for determining the additional tax liability exceeds PLN 15 million.

2. Penalties under the Fiscal Penal Code (KKS)

Local file

  • Failure to prepare Local Transfer Pricing Documentation, providing documentation inconsistent with actual transaction details or failing to attach the required Master File can result in fines of up to 720 daily rates (currently approx. PLN 44 million).
  • Late preparation of Transfer Pricing Documentation may result in fines of up to 240 daily rates (currently approx. PLN 14 million).

Transfer Pricing Information (TPR-C)

  • Failure to submit the TPR-C form or providing data inconsistent with the Local Transfer Pricing Documentation or actual transaction details can result in fines of up to 720 daily rates (currently approx. PLN 44 million).
  • Late submission of the TPR-C form may result in fines of up to 240 daily rates (currently approx. PLN 14 million).

How can we help?

Navigating transfer pricing regulations is complex, and the financial risks of non-compliance are significant. Our team of transfer pricing specialists provides comprehensive advisory services, including: ✅ Preparation of Local and Master Files ✅ Preparation of Benchmarking studies ✅ Support in preparation of TPR-C forms ✅ Support in tax audits and negotiations with tax authorities ✅ Strategic planning to optimize transfer pricing policies.

By partnering with us, you ensure full compliance with Polish tax regulations while minimizing tax risks and optimizing your intercompany transactions. Don’t wait until the deadlines approach — contact us today to secure.