Master File (group transfer pricing documentation) – what is it and who is required to prepare it?
- 3 minuty
For many taxpayers, transfer pricing (TP) compliance forms a crucial part of their annual tax closing procedures. The period from October to December is typically intensive –preparing the Local File and submitting the TPR-C form requires precision and coordination across multiple departments. Alongside local documentation, the Master File – the group-level transfer pricing documentation – must not be overlooked. In this article, we explain who is required to prepare the Master File in 2025 and what key components it must include.
What is the Master File?
The Master File provides a comprehensive overview of how a multinational group operates, covering the following areas:
- Ownership and organizational structure: a shareholder tree detailing subsidiaries, joint ventures, branches, and headquarters.
- Key intangibles: group-wide strategies for the development and management of intellectual property (IP), including patents, trademarks, licenses, and know-how.
- Group financing arrangements: central financing models, intercompany loans and guarantees, and foreign exchange risk management.
- Main intercompany transactions: sale of goods and services, provision of centralized services, franchising arrangements.
- Consolidated financial and tax information: financial statements, income statements, tax policy, risks, and the group’s transfer pricing policy.
Who is required to prepare a Master File?
The obligation applies to related entities that meet all of the following criteria:
- Are required to prepare a Local File;
- Prepare consolidated financial statements using the full or proportional consolidation method;
- Had consolidated revenues exceeding PLN 200 million (or the equivalent) in the 2024 fiscal year – as per Article 11k(4) of the Corporate Income Tax Act (CIT Act).
Submission deadline
The Master File for 2024 must be prepared by 31 December 2025 (i.e. by the end of the twelfth month following the end of the fiscal year).
This means:
- For calendar-year taxpayers: the deadline is 31 December 2025.
- For non-calendar-year taxpayers: the deadline falls on the last day of the twelfth month after the fiscal year-end.
Key components of the Master File
- Group overview
- Ownership and organizational structure,
- Scope of business activities,
- Group restructurings and changes in 2024.
- Intangible assets
- Group IP strategy,
- List of key patents, licenses, and know-how.
- Financial transactions
- Central financing model,
- Inventory of loans, guarantees, and other financial instruments.
- Financial and tax information
- Consolidated financial statements for 2024,
- Group tax policy, including updates related to BEPS 2.0 (Pillar Two).
Language requirements
The Master File may be prepared in English. However, under Polish regulations, the tax authority may request a Polish translation within 30 days of issuing a formal request. Therefore, it is advisable to:
- review the documentation provided by the parent company for compliance with Polish regulations,
- fill any information gaps and prepare a complete Polish translation in advance.
Best practices for preparing the Master File
- Start early – begin collecting data from Q2 of the fiscal year.
- Coordinate with headquarters – set a clear timeline with the Master File provider.
- Involve internal experts – legal, tax, controlling, and R&D departments should be engaged.
- Leverage IT solutions – use ERP/TP systems to automate data collection and report generation.
- Ensure data quality – verify consistency with consolidated financials and the TPR-C form.
Summary
The Master File is a vital element of any multinational group’s transfer pricing strategy. Proper preparation:
- Enhances transparency within the group,
- Strengthens the defense against tax adjustments,
- Simplifies the transfer pricing audit process.
We encourage you to consult MDDP for assistance in preparing or reviewing your 2025 Master File. >> https://www.mddp.pl/documentation-and-reporting-obligations-in-the-field-of-transfer-pricing/
FAQ
Is an audit of the Master File required?
There is no legal requirement for the Master File to be audited. However, it is recommended that key data (e.g., financial transactions and IP details) be reviewed by a statutory auditor or an external TP expert.
What are the penalties for not preparing a Master File?
Failure to attach the group transfer pricing documentation (Master File) to the Local File – despite a legal obligation – may result in a fine of up to 720 daily rates, which currently may amount to PLN 34.5 million. The same penalty applies for providing false or misleading information. Late submission may result in a fine of up to 240 daily rates, i.e. more than PLN 11.5 million.
Does the Master File replace the Local File?
No – both documents are complementary. The Master File provides a global view of the group, while the Local File focuses on the individual taxpayer’s specific intercompany transactions.
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