Choice of new TP provisions to FY 2018 questioned by tax authorities

Recently the Polish tax authorities questioned application of new TP documentary requirements to transactions carried out in FY 2018, even though the taxpayer has explicitly chosen to apply this regime.

The new TP regime which entered into force in 2019 allows the taxpayers to apply new regulations retroactively to FY 2018 if it is more suitable than application of provisions in place in FY 2018. Since the documentary threshold is in the majority of cases much higher under the 2019 TP regime, many taxpayers chose to apply this regime to their CIT settlements for FY 2018.

A tax ruling recently received by one of such taxpayers effectively denies the right to apply 2019 TP regime to transactions continued from FY 2017. This means that the taxpayers which have chosen 2019 TP regime to such transactions may be in delay with preparation of appropriate TP documentation for FY 2018 in accordance with regulations in place in that year.

Taking the above, it is crucial to review the TP documentation prepared for FY 2018 and if necessary supplement it as well as correct the statement on TP documentation submitted by the Management Board.

We are happy to assist you in the above process. If you have any questions or doubts please do not hesitate to contact us.

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