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.