One of the key matters for preparing a benchmarking analysis is the comparability of underlying data. What if the data are not perfectly comparable? If that is the case, it may be necessary to apply comparability adjustments When comparability adjustment is a good thing? The comparability adjustment seeks to increase the reliability of a benchmarking…
Not long ago, the global financial market was heavily discussing the topic of LIBOR index being replaced with a new interest rate. In Poland, the process of replacing the reference rate is underway and is scheduled to be completed in late 2024/early 2025. Our local change and the replacement of WIBOR and WIBID by WIRON…
The Ministry of Finance has already made us look forward to annual changes in the TP-R form. Transfer Pricing information gets more and more detailed and complicated every year. This one is no different. We already know that the TP-R form will be expanded to include the so-called statement. By the way, the statement itself…
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.…
Magdalena Marciniak and Marta Klepacz of MDDP lay out the challenges and complexities of attempting group analysis in Poland, and outline the approach of the domestic tax authorities. Benchmarking studies are a well-known topic in most tax jurisdictions. Just like anything else in life, there is no common understanding of how it should ultimately look.…
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…