Transfer pricing statement and indirect transactions with countries considered as tax havens
We would like to inform you, that as of January 1, 2021, pursuant to Art. 11o Sec. 1a and 1b of the Corporate Income Tax Act, the obligation to prepare the Transfer Pricing documentation also applies to a controlled transaction or a transaction other than a controlled transaction, if the actual owner has a place of residence, registered office or management on the territory or in the country applying harmful tax competition, and the value of the transaction for the tax year exceeds PLN 500,000.
Thus, Polish tax regulations require verification of the beneficial owner of payments made in connection with transactions conducted in a given year with both related and unrelated entities. Such verification is required for transactions with a net value exceeding PLN 500,000 during the tax year.
In such a situation, Polish entities are required to exercise due diligence to verify whether the final owner of payments (receivables) made to a business partner, e.g. in connection with a service or goods transaction, is not an entity with a place of residence, registered office or management on the territory or in a country applying harmful tax competition.
In connection with the above, it is recommended to determine whether or not the Company must prepare tax documentation for the transaction in question. This will simplify procedures on the part of the Company.
In view of the above, it is recommended to determine whether or not the Company must prepare a tax documentation for the transaction in question. This will simplify procedures on the part of the Company.
It should be mentioned that the issues in question are Polish regulations and do not directly result from international regulations, however, in the opinion of the Polish legislator, these regulations do not violate EU and OECD regulations.
If you have any questions regarding this topic or if you are in need for any additional information – please do not hesitate to contact us:
CUSTOMER RELATIONSHIPS DEPARTMENT
Head of Customer Relationships
Department / Senior Manager