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Deadlines for the preparation of TP documentation in Poland will be extended / TP documentation obligations will be simplified

On Friday (16 February 2018), Ministry of Finance published a statement on its website about the ongoing works on extending the deadline for taxpayers in the area of Transfer Pricing for FY 2017 and 2018. In particular deadline for:

  • preparation of local and master file,
  • submitting of a statement to the tax authorities about the preparation of TP documentation as well as
  • preparation of CIT-TP / PIT-TP report,

will be extended by 6 months (for both FY 2017 and 2018).

The draft version of new decree is currently a subject of intra-departmental consultations. In practice, taxpayers having a tax year similar to the calendar year will be obliged to prepare TP documentation and submit CIT-TP / PIT-TP reports by the end of September (previous deadline: the end of March).

Ministry of Finance also announced that is working on the preparation of amendments to the current TP regulations which will significantly reduce and simplify the documentation obligations for taxpayers in Poland. According to the Ministry of Finance, the new Transfer Pricing regulations (in force since 1 January 2017) have imposed new documentary and reporting obligations (e.g. local file, master file, statement, CIT-TP / PIT-TP report), and the deadline for their preparation is the day of filing the tax return. Therefore, Ministry of Finance received many signals indicating technical problems and complaints about significant amount of work, time and financial resources to fulfil the imposed obligations within the statutory deadline. To mitigate the negative impact of new regulations, Ministry of Finance is conducting parallel work on the preparation of new amendments, which will significantly reduce and simplify TP obligations in Poland. As the changes might be beneficial for taxpayers, the introduction of new regulations may be in force with retroactive effect starting from 1 January 2018.

This initiative of Ministry of Finance should be recognized as a positive. The accumulation of different tax and reporting duties within the first quarter of the year probably does not help taxpayers meet their statutory obligations. On the other hand, there is no need for a deadline for the preparation of TP documentation to be so short, because the tax authorities verify the settlements with related entities usually in a more distant perspective. New regulations are so demanding and the thresholds are so low that preparation of complete TP documentation especially for large capital groups by the end of March would have been a significant challenge. We hope that the legislative process for the new decree will be quick and be the end of February taxpayers will be assured that the planned regulations will come into force.

We will keep you up to date on the status of work in the above described field.

Direct link to the statement (in Polish): Terminy na przygotowanie dokumentacji TP zostaną wydłużone