Local file documentation – the last straight

In 2023, the deadlines for completing transfer pricing obligations for 2022 have been shortened. The starting point for fulfillment of TP obligations is reliable local documentation (Local File).

Deadline for fulfillment of obligations

For taxpayers whose tax year coincides with the calendar year, the deadline for Local File for 2022 is October 31, 2023. Admittedly, taxpayers submit the documentation they have prepared only upon request from the tax authority, and the deadline is 14 days for transactions carried out after December 31, 2021. In such a rather short period of time, the preparation of documentation can be difficult, especially since the authorities usually audit a larger number of transactions at the same time. In practice, the preparation of documentation often involves obtaining some of the information from the Group or the need to update the transfer pricing analyses.

Identification of transactions to be documented

The transfer pricing regulations do not make it possible to conclusively resolve what is meant by a transaction. This causes a lot of ambiguity and problems for taxpayers, who often do not know whether they should prepare tax documentation for a given business operation.

According to the tax authorities, the concept of transaction cannot be understood only as an operation of buying or selling goods or services. A transaction should be understood broadly, as an economic operation entered into by related parties.

Therefore, in order to identify tax obligations, we recommend checking whether during the tax year your company, for example, received / provided (even free of charge) guarantees or warranties, carried out a restructuring or capital increase.

The most important elements of local transfer pricing documentation

When working on the documentation, special attention should be paid to the precise presentation of the analysis of the functions performed by the parties to the transaction, including assets and risks. The description of the functional analysis may determine the assessment of the entire profile of the entity. Therefore, it is advisable to diligently prepare all descriptions within the documentation, as any unfortunate wording may be relevant in case of a possible tax audit.

What’s more, for 2022, taxpayers, in addition to confirming that transfer prices are set on the terms that unrelated parties would set among themselves, will also declare that the local transfer pricing documentation has been prepared in accordance with the actual state of affairs. Simply updating the documentation, without going into the facts, is risky. Often inconsistencies in the facts are pointed out by tax audit, and this generates unnecessary stress and the need to prepare appropriate explanations in a limited time.

It should be remembered that the most important element of the documentation is to demonstrate the marketability of the settlements carried out. With the exception of a few exemptions, taxpayers are required to have a valid benchmarking or compliance analysis for each transaction covered by the documentation obligation. Importantly, the taxpayer is also required to refer within the documentation to the results of the transaction and any deviations from the analyses, and justify their existence. Notably, any deviations will be evident in the Form TPR and this could raise the interest of tax authorities in the event of a potential tax audit.


Over the past few years, the fulfillment of transfer pricing obligations has occupied an important place in the calendar of taxpayers, especially at the end of the year. Properly prepared TP documentation should form the basis for filing Form TPR, the deadline for which is November 30 this year. Since there is less and less time left, and the legislator has also stipulated higher sanctions for failure to fulfill TP obligations, we encourage you to contact our experts who will help you fulfill all obligations on time.

Martyna Filipiak_kwadrat

Martyna Filipiak

Manager in the Transfer Pricing Team

+48 608 401 370