• Support in all verification activities, including

    • developing the contractor verification procedure in terms of settlements with entities from the so-called tax havens,
    • drafting clauses to be applied in agreements with contractors and documents so that every effort is possible to exercise due diligence required by law and to obtain all information necessary to verify contractors,
    • adding relevant provisions in the transfer pricing policy or other internal documents addressing the verification procedure and further proceedings if a contractor transacts with an entity from the so-called tax havens.
  • Support in fulfilling all documentation and reporting obligations

    • preparing transfer pricing documentation, with all additional elements to be addressed in the documentation covering transactions with tax havens,
    • reviewing settlements for compliance with the arm’s length principle by preparing an appropriate benchmarking study,
    • assistance in obtaining information necessary to prepare complete transfer pricing documentation and benchmarking study,
    • support in filling in the TP-R form,
    • support in the case of a possible audit of such a transaction by tax authorities.
Why this is so important?

Starting 2021 the documentation obligation covers all transactions with a related and unrelated entity whenever annual value exceeds PLN 500,000, if the beneficial owner has a place of residence, registered office or management board in the territory or in a country applying harmful tax competition.

The legislator presumes that the actual beneficial owner has a place of residence, registered office or management board in the so-called “tax haven” when the business partner of a taxpayer (or a company without legal personality) makes settlements in the tax year with an entity having its registered office or management in the so-called “tax haven”.

As a consequence, a taxpayer (or an organizational unit with no legal personality), making transactions exceeding PLN 500,000 (about EUR 110,000) with a business partner not located in a country applying harmful tax competition, must each time verify if the contractor makes settlements with entities from “tax havens”. If that is the case, the transaction between the Polish taxpayer and this very business partner will be subject to transfer pricing documentation. The obligation to verify contractors lies with the taxpayers.

While establishing these circumstances, the taxpayer or organizational unit with no legal personality should exercise due diligence.

Verifying contractors in terms of settlements with entities from tax havens

Now is the time to set up the process of reviewing business partners (including unrelated entities!) that would be fulfilling the documentation obligations, exercising due diligence and not disrupting operations and business relations.


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