Report: Transfer pricing audits in Poland

The report on transfer pricing audits consist of tree parts:

1. Statistical part
   dedicated to analysing data on transfer pricing audits carried out by Polish tax offices as well as customs and tax control offices between 2017 and 2022.
2. Judicial part
   in which we commented on what we consider to be the most interesting court judgments related to transfer pricing issued in 2022 in Poland and abroad.
3. Fiscal criminal liability part
   in which we discussed the effects of the reforms in terms of the Polish fiscal criminal liability regime for irregularities in fulfilling the obligations stipulated under transfer pricing regulations.

New obligations related to transfer pricing reporting in Poland

Transactions concluded by taxpayers with related parties have been of particular interest to Polish tax authorities during tax audits for a few years already.

There is no doubt that it results from imposing on taxpayers in 2017 a number of new information obligations related to transfer pricing, such as:

• obligation to prepare a benchmarking study to verify the market relevance of individual transactions with related parties;
• obligation to prepare and file a simplified report on transactions with related parties (CIT-TP or PIT-TP), replaced in 2019 by obligation to file transfer pricing information (TPR-C or TPR-P form);
• obligation to file, subject to fiscal criminal liability, a statement on preparing tax documentation, replaced in 2019 by obligation to file a statement that local transfer pricing documentation has been prepared and that the transfer pricing covered by the documentation are determined on the terms that unrelated parties would have agreed between themselves.

Consequently, data provided to the tax authorities allowed for, among others:

• efficient verification of the arm’s length nature of individual transactions with related parties;
• selection for tax audits similar types of transactions or taxpayers carrying out similar activities within groups of related entities.  

Key statistical conclusions from the report on transfer pricing audits:

These circumstances lead to a growing interest of tax authorities in the transfer pricing subject. This is reflected in the increasing every year - starting in 2019 - a number of tax audits carried out in this area.

By 2021, the effectiveness of the audits (understood as the number of audits completed with an income upward adjustment in relation to the number of all audits carried out) was decreasing. From 2022 onwards, we can see the upward trend again.

The effectiveness of audits carried out by the UCS is decreasing. Effectiveness of audit understood as the amount of an income upward adjustment per audit completed with an upward adjustment.

The effectiveness of audits carried out by the US was decreasing until 2021, but from 2022 onwards this trend rebounded. The audits carried out by the UCS continue to be more onerous for taxpayers than those carried out by the US.

Download the report „Transfer pricing audits in Poland”