Preparing transfer pricing documentation for transactions between related entities is a mandatory obligation under tax regulations. For transactions executed in 2024, where the fiscal year aligns with the calendar year, the local transfer pricing documentation must be completed by October 31, 2025.

Additionally, the TPR-C/TPR-P declaration must be submitted to the tax office by December 1, 2025. 

What is transfer pricing?

It is an accounting method used by multinational corporations to set prices for transactions of goods and services between their divisions or subsidiaries. It ensures these internal transactions reflect market-based prices similar to those in external markets.

Transfer pricing helps companies allocate profits strategically among subsidiaries, which can result in tax savings. However, tax authorities closely monitor transfer pricing to prevent the manipulation of taxable income across different tax jurisdictions.

Who is required to prepare transfer pricing documentation?

Taxpayers involved in transactions with related parties exceeding legally established thresholds are required to prepare local documentation. In 2024, two main transaction thresholds apply: 

• PLN 10,000,000 for goods and financial transactions, 
• PLN 2,000,000 for service transactions and other transactions not classified as goods or financial transactions. 

Documentation must be prepared for controlled transactions whose value exceeds the above limits within the fiscal year. 

Our professional accounting services can help you meet these requirements efficiently, minimizing errors and delays. 

What should local transfer pricing documentation include?

Local documentation must contain: 

1. Detailed description of the related entity.
2. Description of the transaction, including an analysis of functions, risks, and assets. 
3. Transfer pricing analysis that may take the form of a comparability analysis or a compliance analysis.
4. Financial information related to the transactions. 

Precise guidelines for documentation preparation are outlined in the Polish Ministry of Finance regulations dated December 21, 2018, with updates published in Dz.U. 2023, item 1783 and 1813. 

TPR-C and TPR-P reports

TPR-C and TPR-P forms are key tools for reporting detailed information about transactions with related entities to tax authorities. The scope of data depends on whether the entity prepared local transfer pricing documentation or was exempt (e.g., certain domestic transactions). 

TPR information is based on: 

• local documentation – when required, 
• financial statements or other documents – when local documentation was not mandatory. 

The deadline for submitting these reports is usually the end of November of the following fiscal year. For 2025, the deadline is extended to December 1, due to November 30 falling on a Sunday. 

Penalties for missing transfer pricing documentation

Upon request by tax authorities, a taxpayer who is obligated to prepare documentation must submit it within 14 days of the notice. However, it is important to note that having documentation does not shift the burden of proof to the taxpayer during audits – tax authorities must demonstrate that the transaction price deviates from the market value. 

Moreover, failure to provide required documentation does not automatically justify estimating the taxpayer’s income but can result in tax-related criminal liability. 

Therefore, professional provide comprehensive support to ensure timely and compliant fulfillment of transfer pricing obligations. 

Contact us, if you need additional support in Accounting and HR & Payroll services.

Text based on: INFORLEX