Report: APA Procedure

A tool for efficient tax risk management in new transfer pricing realities

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Main areas of expertise

Transfer pricing documentation

We assist our clients in preparation of audit-defendable local and global transfer pricing documentation (Local file, Master file, CbC reporting). We have broad experience in preparing tailor-made full documentation package for all types of intercompany transactions, business restructuring and other events. Transfer pricing documentation prepared by our team can be compliant with:

  • Polish TP regulations (current and previous regulations – for all years open to tax audits)
  • OECD TP Guidelines (format in accordance with OECD BEPS Action 13 requirements)
Our documentation services include:
  • Preparation of full-scope documentation – designed to meet all statutory documentation requirements
  • Preparation of simplified documentation – limited-scope documentation for taxpayers who voluntarily prepare TP documentation as a tool for managing tax risks
  • Verification of documentation prepared at the group level – cost-effective approach for our clients preparing TP documentation on their own; within this scope we aim to make the Client’s TP documentation compliant with Polish TP documentation requirements and we review if the benchmarking analyses prepared by the Client are in line with Polish TP regulations
  • Preparation of multi-country documentation – in cooperation with our Taxand network partners we prepare the TP documentation across multiple tax jurisdictions; these services are designed especially for multinational groups processing TP documentation centrally and at the same time ensuring that specific local transfer pricing documentation requirements are met.

Benchmarking studies

Following the arm’s length principle is one of the biggest tax issues that multinational capital groups face. Our benchmarking studies are designed to support taxpayers in setting up TP policies, verifying the arm’s length transactional compensation and for compliance purposes. We prepare comprehensive benchmarking analyses determining arm’s length pricing in line with the taxpayer’s facts and circumstances e.g. for manufacturing, distribution, R&D activities as well as for commodity, service and financial transactions (including bonds, loans, guarantees), to name only the most common transactions being benchmarked. We offer our expertise in preparing:

  • Pan-European benchmarking studies using the BvD Orbis database compliant with the OECD TP Guidelines,
  • Local benchmarking studies based on (Polish) comparables using Quick TP Analytics tool,
  • Financial benchmarking studies using the Bloomberg Terminal.

APA – proactive approach to transfer pricing risks

As Crido we offer full range of support in the APA (advance pricing agreement) procedure which is the most effective tool of transfer pricing risk management. Our support covers also the simplified APA procedure, which is the remedy for limitation on tax deductibility of intra-group service and intangible charges.

Our approach
  • We develop strategies for applying for APA based on the level of complexity of transactions while at the same time seeking to minimize administrative costs of the process,
  • We prepare complete APA applications, taking into account the type of APA procedure, the nature of transactions and the requirements to present the economic justification (the so-called benefit test),
  • We actively support our clients in the APA negotiation process with the tax authorities by moderating preliminary meetings, conducting the official exchange of correspondence, participating in the reconciliation meetings (negotiations) and by monitoring the process.

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How can we help?

It’s worth working with us

Our TP team consists of more than 30 experts who are part of over 120 people tax advisory department. Among team members there are lawyers, tax advisors and economists as well as specialists in enterprise and intellectual property valuations. The team participates in legislation processes regarding new TP regulations, Transfer Pricing Forum (FCT) organized by the Polish Ministry of Finance and in working groups under FCT.

CRIDO has been qualified to the highest category (Tier 1) of consulting companies in Poland which provides services in the field of transfer pricing. The distinction awarded by International Tax Review has been published in the guide: World Transfer Pricing 2019: "The guide to the world's leading transfer pricing practices".

Three times in a row the team received „TP Firm od the Year” title in the „International Tax Review” rankings (2016-2020).