During audits, tax authorities often scrutinize the increase/decrease in the interest rate on loans with reference to the results of the benchmarking. It may happen that the newly determined interest rate in an intra-group loan is considered non-arm’s length, which paves the way to estimating the taxpayer’s income. The ruling of the VAC in Bialystok[1]…
Over the past few years, tax regulations on transfer pricing have been significantly amended at least several times. A number of transfer pricing exemptions have also evolved with the emergence of new obligations. The following is a practical summary of exemptions available for 2022 transactions. Domestic exemption The obligation to prepare local file does not…
Transfer pricing – your basic use of a benchmarking analysis Benchmarking analysis is a tool to verify whether the terms set in transactions between related parties correspond to the arm’s length principle. It allows examining whether the conditions in a transaction between related entities correspond to those that third parties have set or would set.…
An increasing number of countries are introducing safe harbour mechanisms. This is a significant convenience for taxpayers in settlements with related parties. Among the world’s largest economies, these regulations are in place in the US, India, South Korea, Russia, Australia, Spain, Mexico, Austria or the Netherlands. Most jurisdictions have chosen to adopt safe harbour solutions…
It is a truth commonly acknowledged that related-party settlements have been scrutinized by tax authorities for several years. In 2022, more than 500 transfer pricing controls were taking place: 370 were completed and 242 were pending. In 2022 alone, the amount of additionally estimated income exceeded PLN 1 billion (almost PLN 220m more than in…
Cost optimization-oriented payment management as a controlled transaction Payment management to optimize costs of the payment settlement process using the PoB (payments on behalf) model is a controlled transaction – as stated by the District Administrative Court in Warsaw in the judgment of 10 August 2022 (file ref. III SA/Wa 3029/21). The Court was of…
Comparative analysis, also referred to as benchmarking analysis, is basically a key element of a transfer pricing documentation. Its purpose is to demonstrate that a given controlled transaction was made in accordance with the arm’s length principle. A correctly prepared analysis is therefore a security for the taxpayer in case allegations are raised by tax…
Financial institutions more and more often require guarantees when granting financing to enterprises. Entities belonging to capital groups may use intra-group guarantees as an alternative to guarantees from external financial institutions. It is the easiest and fastest way to obtain financing. One option are mutual guarantees: two or more related companies guarantee each other’s liabilities.…
Q1 2023 is coming to an end and taxpayers have already familiarized themselves with the changes brought in by the new year in the area of transfer pricing. The key one are shortened documentation and reporting deadlines, but apart from that, a number of seemingly minor changes were introduced at the beginning of the year.…
Nowe rozporządzenie dotyczące formularzy TPR za rok podatkowy 2022 skierowane do podpisu Ministra Finansów For most taxpayers operating in corporate groups the end of March 2023 is associated with the deadlines for meeting the last transfer pricing obligations. Some of them still apply to 2021. TPR for companies with a shifted tax year As a…