All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Poland: The CIT-8 return involving new transfer pricing obligations

Sponsored by

sponsored-firms-mddp.png
It has never been so important to acquire, design, build and manage digital products for tax professionals

New regulations in the field of transfer pricing documentation came into force in Poland on January 1 2018.

New regulations in the field of transfer pricing documentation came into force in Poland on January 1 2018. The new regulations introduced important changes for taxpayers.

Transfer pricing documentation now consists of three parts: the local file, the master file and the country-by-country reporting. Additionally, the new rules introduced a CIT-TP (corporate income tax – transfer pricing) form which must be attached to the annual tax return and which includes information concerning the taxpayer.

The new regulations determine a statutory deadline for transfer pricing documentation preparation which coincides with the date of filing a tax return (CIT-8 return).

Therefore, in addition to their obligation to file a tax return, taxpayers should also be ready with the transfer pricing documentation by the same date. The deadline concerns taxpayers whose tax year coincides with the calendar year. For other taxpayers, the deadline will be in line with the end of the tax year selected by them. Failure to prepare the documentation involves the risk of severe penal tax sanctions.

Although the taxpayer is not obliged to submit the documentation by this deadline, the tax authorities can check almost immediately after this date whether taxpayers have met their statutory obligations. In such a situation, the seven-day deadline for the submission of the documentation to the authority may be impossible to keep if work on it has not even begun.

Furthermore, the annual tax return form has also been changed. Taxpayers now have to report on additional issues regarding their cooperation with related entities. In the new version of the CIT-8 returns, the taxpayer will also have to declare whether it is obliged to prepare:

  • Local documentation,

  • Group documentation – a master file; or

  • A comparative data analysis.

Additionally, where the taxpayer is obliged to prepare certain documentation, it should also declare that preparation of the documentation has been completed. The declaration concerns the taxpayer's preparation of the local documentation only – a local file (including benchmarks), and does not include the information provided as part of the group documentation (master file).

The declaration should be submitted by the relevant deadline set for submitting the annual tax return for the given year. In other words, in the case of taxpayers whose tax year coincides with the calendar year, it should be submitted by March 31. For other taxpayers, the deadline is within three months of the end of the tax year.

The Ministry of Finance has yet to publish an official model declaration, but this does not exempt taxpayers from the obligation of submitting their declarations.

The Ministry of Finance is working on the regulation on the extension of the deadline for preparing the transfer pricing documentation, submitting the declaration as well as the CIT-TP form. The ministry plans to extend this deadline for obligations occurring in 2018 and 2019 to September 30. It is therefore intended to cover documentation obligations for FY 2017 and FY 2018.

It should be borne in mind that failure to prepare the transfer pricing documentation by the statutory deadline means that the taxpayer would have to submit a false declaration as regards the preparation of the documentation, or fail to submit such a declaration altogether. Each of these situations exposes the taxpayer to severe penal fiscal sanctions.

It is therefore necessary to take due care in fulfilling the statutory deadline for the preparation of transfer pricing documentation in Poland.

We are waiting for the publication of the Minister of Finance's regulation regarding the extension of the deadline for fulfilling the transfer pricing obligations. The regulation is planned to be issued on February.

marciniak.jpg
stupak.jpg

Magdalena

Marciniak

Karolina

Stupak

Magdalena Marciniak (magdalena.marciniak@mddp.pl) and Karolina Stupak (karolina.stupak@mddp.pl)

MDDP, Poland

Tel: +48 (22) 322 68 88

Website: www.mddp.pl

more across site & bottom lb ros

More from across our site

The Italian government published plans to levy capital gains tax on cryptocurrency transactions, while Brazil and the UK signed a new tax treaty.
Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.