Companies with a shifted financial year – transfer pricing obligations

Transfer pricing is not limited to entities with a calendar year. Companies with a shifted financial year have obligations at various points throughout the year, depending on the date on which their financial year ends. 

For some companies – for example, those with a year ending 31 March – obligations fall as early as January and February. For others, with a financial year ending in June, September, or October, deadlines move accordingly to later months of the year. 

This article explains who is subject to transfer pricing obligations, which documents must be prepared, and what to watch out for to mitigate tax risks and penalties. 

Who has transfer pricing obligations outside the standard calendar? 

Transfer pricing obligations are tied to the financial/tax year, rather than the calendar year. This means companies with a shifted financial year fulfil their obligations at different points throughout the year. 

Under the law: 

• • Local Transfer Pricing Documentation (Local File) – must be prepared by the end of the 10th month following the end of the financial year. 

• • Transfer Pricing Report (TPR) – must be submitted by the end of the 11th month following the end of the financial year. 

• • Group Documentation (Master File) – must be prepared by the end of the 12th month following the end of the financial year. 

Examples for companies with a shifted financial year: 

• • Financial year ending 31 March → TP documentation due in January, TPR due in February 

• • Financial year ending 30 June → TP documentation due in April, TPR due in May 

• • Financial year ending 30 September → TP documentation due in July, TPR due in August 

• • Financial year ending 31 October → TP documentation due in August, TPR due in September 

What transfer pricing obligations apply to companies with a shifted financial year? 

Local File 

Companies exceeding statutory documentation thresholds must prepare local TP documentation. 
The documentation should include: 

• • A description of the company and its business, 

• • A detailed description of controlled transactions, 

• • A functional analysis of the transaction parties, 

• • A transfer pricing analysis (benchmark or compliance analysis), 

• • Financial information relating to the transactions. 

Transfer Pricing Report (TPR-C / TPR-P) 

Another obligation is the submission of the TPR: 

• • TPR-C – for corporate income tax (CIT) taxpayers, 

• • TPR-P – for personal income tax (PIT) taxpayers. 

The TPR must be consistent with the TP documentation and financial data and reflect the actual conditions of the transactions. Tax authorities use this document to assess and decide whether to initiate potential audits or proceedings. 

Declaration of TP documentation preparation 

Within the TPR form, the head of the entity (e.g., a board member) declares that: 

• • Local File has been prepared, 

• • Controlled transaction prices have been set at arm’s length. 

This declaration is made under the risk of criminal tax liability, requiring thorough verification of the data. 

Why transfer pricing obligations can be challenging in cases of acquisition, transformation, or a shortened financial year 

When a company is acquired, the financial year is often shortened, which significantly complicates the fulfilment of transfer pricing obligations. 

Additionally, applying standard documentation deadlines to a non-standard, shortened year increases the risk of errors, incomplete documentation, and disputes with tax authorities. 

Another example is a legal transformation of a company during the financial year, which raises questions regarding transfer pricing documentation obligations. Taxpayers in such cases must address challenges in correctly delineating accounting periods, allocating transaction values appropriately, and determining the rules for preparing tax documentation. 

Why companies should act early 

Companies with a shifted financial year should plan TP obligations in advance to avoid: 

• • Errors in documentation and TPR, 

• • Tax risks and criminal tax penalties, 

• • Issues in group reporting or during a tax audit. 

Avoid transfer pricing errors! 

If your company has a shifted financial year and requires support with transfer pricing, we encourage you to contact our experts >> https://www.mddp.pl/transfer-pricing/#formularz

We offer comprehensive transfer pricing support, including: 

• • TP obligation audits to ensure your company meets all deadlines, 

• • Local File in compliance with current requirements, 

• • Assistance with TPR submission (TPR-C / TPR-P), 

• • Preparation or verification of group documentation to ensure consistency with the group’s TP policy, 

• • Support for fulfilling TP obligations for foreign entities, in line with local deadlines and regulations. 

This ensures your company is fully protected against tax risks, and all documentation and reporting obligations are completed on time and in compliance with regulations. 

FAQ – Frequently Asked Questions