The current crisis, caused by the COVID-19 epidemic, will undoubtedly have long-term effects. It is highly probable that today’s epidemiological and economic situation will force capital groups to change their transfer pricing policies.

Faced with a decline or total lack of revenues caused by suspended business operations, problems with the supply of materials or raw materials or with payments from customers, capital groups will be looking for savings and free financial resources, just like they did during the 2008-2009 downturn. This may trigger changes in the rules for setting prices in intra-group transactions in the course of 2020, aimed primarily at reducing the level of profits (margins) realized by particular entities and change of the allocation of profits within the group value added chain.

All potential changes in transfer pricing models should be carefully analyzed for compliance with transfer pricing regulations. Please note that any changes in the settlements introduced during 2020 must be properly justified both from the business and arm’s length perspective. Also, if particular business operations (activities) within groups are to be terminated, transferred or consolidated, a detailed analysis is necessary to check whether these activities may be classified as business restructuring within the meaning of transfer pricing, what will inherently trigger the issue of whether or not there is any reason for additional remuneration (so-called exit payment).

Given the above, it is crucial that all changes in intra-group relations and transactions be preceded by a high-level analysis in terms of potential tax consequences. It is recommend to gather all documents, analyses and studies that will confirm the business rationality of the changes. This way you can prepare adequate description and justification in the transfer pricing documentation for 2020. It seems of paramount importance in the context of the obligation imposed on management board members to confirm the arm’s length nature of intra-group transactions in a statement submitted for 2020 in terms of criminal and fiscal responsibility.

Finally, some capital groups — since the deadline for filing annual tax returns for 2019 is postponed until the end of May 2020 — may try adjusting the assumed arm’s length profitability of particular entities to their economic situation resulting from the pandemic. They might try reducing or increasing the assumed profitability within the arm’s length range from the benchmarking analysis. If such decisions are made with respect to Polish entities, it is worth checking before the end of May whether their final profitability for 2019 is actually at arm’s length level. This is important because this profitability as well as arm’s length ranges, resulting from benchmarking analyses, must be reported in the TP-R report already in September 2020.


If you are interested in obtaining further information and their impact on your activity please contact with:

Renata Dłuska phone + 48 322 68 80; or

Magdalena Marciniak phone  + 48 322 68 84

In MDDP, we have also established a CORONAVIRUS CRISIS TEAM our experts assist in all areas of activity that may be affected by the coronavirus epidemic. We monitor the legislative work related to the coronavirus on an ongoing basis and follow the recommendations of the relevant authorities that may affect the business situation.

Questions and doubts should be addressed to: or directly to persons responsible for specific issues:

TAXES Bartosz Głowacki phone:+48 603 980 382,
LABOR LAW Wiktoria Cieślikowska phone:+48 22 376 52 97,
PERSONAL DATA Daniel Michalski phone:+48 22 376 52 02,
PAYMENT BACKLOGS, BANKRUPTCY AND RESTRUCTURING Bartłomiej Sadura phone:+48 737 883 705,
CONTRACTS Aleksandra Grabarska phone:+48 22 376 52 20,
CORPORATE FINANCE Łukasz Zabłocki phone:+48 22 320 48 52,
FINANCIAL STATEMENTS Magdalena Michniewicz phone:+48 502 413 975,
BOOKKEEPING Agnieszka Tyczyńska-Osińska phone:+48 504 120 116,
PAYROLL Barbara Kochańska-Mierzejewska phone:+48 516 281 916,