Technical aspects of submitting for the 2022 TPR form. How to do it?

The deadline for submitting the 2022 TPR form (for taxpayers whose tax year coincides with the calendar year) was supposed to be 30 November, less than a month away. It should have been. The Ministry of Finance’s announcements suggest that the deadline will be extended to the end of February 2024. Unfortunately, we do not yet know the details of this change. In a communiqué, the Ministry set itself a deadline of the end of last week to publish a draft of the amended regulation for consultation. The draft regulation has not been published, it is not known when this will happen, and formally the November deadline is still applies.

This is the fourth time that taxpayers have had to submit the TPR form to the tax authorities. It seems that the process of filling in and submitting the TPR has been tamed by taxpayers and that it should not cause them any problems. This is because there have been no revolutionary changes in the method of reporting data on transactions required to be included in the TPR. In fact, the legislator realised that the formalities for filling of transfer pricing reporting obligations could even be simplified by merging the declaration on the existence of transfer pricing documentation and the application of the arm’s length principle with the TPR form.

However, what was supposed to be a simplification has perversely raised a lot of doubts. The combination of the declaration and the TP-R form has meant that most of the questions this year have been about the technicalities of signing and sending the TPR form.

First question – who signs?

The main change from previous years is a change in the catalogue of individuals who can sign the TP-R form. This year, this can no longer be done by a representative with a power of attorney to sign a declaration submitted by electronic means of communication (UPL-1). The TPR form for 2022 can, under the new regulations, be signed by:

• a natural person – in the case of a natural person submitting the TP-R form on his or her on behalf,
• a person authorised by the foreign entrepreneur to represent him/her in the branch – in the case of a related that is a foreign entrepreneur with a branch operating in Poland,
• the head of the entity as defined in Article 3(1)(6) of the Accounting Act, or ifthe entity is headed by a multi-member body, by a designated person who is a member of that body,
• attorney, but only one who is an advocate, legal adviser, tax adviser or auditor.

As a result, the TPR form cannot be signed by, for example, the chief accountant (unless he or she does not have the relevant professional qualification). It can be assumed that, in practice, in the vast majority of cases, the 2022 transfer pricing information will be signed by a designated board member. Of course, the fact that one board member signs the TPR does not relieve the other board members from the consequences of failing to comply with their reporting obligations.

Second question – what about the UPL-1?

If the majority – board members will be signing the TP-R forms. Does a board member – by definition entitled to represent the company – need to have a UPL-1 in order to sign the TPR form?

The answer to this question is yes – a board member must have a power of attorney to sign declarations submitted via electronic means of communication (UPL-1). In practice, bizarre situations can arise, e.g. in the case of one-man boards, where a board member, acting on behalf of the company, has to give himself a power of attorney to sign electronic declarations.

It should be noted that if the board member signing the TPR form is a non-resident, he or she will be required to have a Personal Identity Number for proper verification of the UPL-1 power of attorney.

Third question – is the person signing the TPR form also the person submitting the form?

There is no clear answer to this question at the moment (the moment of publishing this entry). This is because we are still waiting for the Ministry of Finance to publish updated explanatory notes to the TPR form, which we expect will also remove any doubt on this issue.
Unofficial information from the Ministry suggests that it will probably be possible for different people to sign and submit the TPR form separately, and for these actions to be carried out on different dates (in the case of signing with a qualified electronic signature).

We hope that these announcements will be implemented as they will make the process of submitting a TPR form much easier for taxpayers.

Check-list

Given the slightly more complicated formal and technical aspects of transfer pricing reporting this year than in the past, it is worth preparing in advance to submit the 2022 TPR form. So, in summary, what needs to be done?

• Firstly, determine who will sign the TPR form on behalf of the company (taxpayer) and whether they have a qualified electronic signature,
• Secondly, check whether the person who has been selected to sign the TPR form has a valid UPL-1 power of attorney. If not, this should be notified as soon as possible. Previously, the tax authority’s UPL-1 verification process usually took a few days, but it may now take longer due to the increased number of such authorizations.
• Thirdly, if the signatory will be a non-resident, it is necessary for the signatory to have a Personal Identity Number.

What next?

If the Ministry of Finance extends the deadline for submitting the TPR form by three months, one has to wonder whether it is really worth delaying. Most of the work has already been done – the transfer pricing documentation and analysis are ready, as is the data for the TPR form. Those three extra months could be a disservice. December, January and February are primarily, the Christmas and New Year period, but also the period of closing the old year, planning the new year, preparing the financial statements – in a word, a period of intensive work related to closing 2023 and opening 2024. It is certainly not a good time to fulfil the reporting obligations for 2022.

So I encourage you to take this final step in relation to your 2022 transfer pricing obligations – submit the TPR form. And one you’ve submitted the 2022 TPR form, after all the hassle of the website publishing, explanatory notes or technical issues, all that remains is to be glad that it’s  behind you.

So maybe this Christmas will  be a time of rest from transfer pricing.