With the deadline for approving and submitting financial statements fast approaching, the financial settlements for the previous year are now largely completed. This is a good time to check whether the value of transactions with affiliated entities has exceeded the transfer pricing documentation thresholds.

When does the documentation obligation arise?

The obligation to prepare local transfer pricing documentation (Local File) arises when the value of a transaction with an affiliated entity exceeds:

• PLN 10 million – in the case of goods and financial transactions (e.g. loans, guarantees, cash pooling),
• PLN 2 million – in the case of service transactions and other transactions.

It should be noted that these thresholds apply to a single transaction. This means that, when determining them, it is often necessary to sum up the values of several similar transactions carried out with affiliated entities.

What are the obligations and deadlines?

If the relevant threshold has been exceeded, the taxpayer is in principle required to:

• prepare the Local File documentation – by the end of the 10^th month following the end of the taxpayer’s tax year,
• submit the TPR-C transfer pricing information – by the end of the 11^th month following the end of the taxpayer’s tax year.
  

It is not worth putting off a review

Failure to comply with transfer pricing obligations may result in severe consequences, including:

• criminal and fiscal liability for board members and other persons responsible for tax settlements,
• an increased risk of a tax inspection and of settlements with affiliated entities being challenged.

We recommend that you review your transactions with affiliated entities for 2025 now, so that you can identify your documentation and reporting obligations well in advance.

If you have any questions, please contact our tax experts at Peter Nielsen & Partners Law Office.