Publication of the regulation on elements of transfer pricing documentation


Publication of the regulation on elements of transfer pricing documentation

Tax Alert 11/2017 | 25 September 2017

New provisions on documenting intercompany transactions (new provisions of the Corporate Income Tax Act and Personal Income Tax Act) became effective on 1 January 2017.

In accordance with the new provisions of the acts, taxpayers in Poland shall accept a three-tiered approach to the documentation of intercompany transactions, consisting of a Local File, Master File and Country-By-Country Reporting. Besides, tax documentation must include benchmark studies showing the market prices / terms of settlement in intercompany transactions.

However, the scope and need to prepare a tier of documentation are dependent on the volume of revenues / costs generated by a taxpayer. Therefore, this obligation shall not apply to small units with revenues / costs of less than EUR 2 million. On the other hand, the obligation imposed upon other taxpayers shall increase in line with their revenues / costs.

Final version of the regulation

On 18 September 2017, the long-anticipated final version of the implementing regulation on CIT information (and PIT information) to be disclosed in tax documentation was published in the Journal of Laws.

This Regulation will become effective after 14 days of its publication.

Scope of the regulation

The regulation in question is a delegation that lays down specific elements making up tax documentation in accordance with Article 9a.2b and Article 9b.2d of the CIT Act.

The regulation imposes broader information obligations upon a taxpayer, connected with intercompany transactions, including justification for prices in intercompany settlements.

The aforesaid implementing regulation provides for the elements of:

  • a Local File,
  • a Master File,
  • a benchmark study.

I. The Local File

As regards the Local File, the regulation specifies in particular:

a) Cash flow details – the documentation is to disclose information on the amount of transaction / other event resulting from invoices issued / received (or amounts resulting from agreements) and amounts of payments received and made;

b) Identification particulars of related parties (the documentation should present names, contact details, tax identification numbers and the type of relationship);

c) Description of the course of transaction / other event (the documentation is to present a detailed functional analysis and indicate the functional profile of the entity).

II. The benchmark study

As regards the benchmark study, the regulation specifies information that shall be included in the study, i.e.:

a) Indication of the tested party / parties to the transaction (and the reason for selecting the tested party);

b) Selection of assumptions for the study (and justification for such assumptions), including: (i) qualities of tested goods, services or other benefits, (ii) course of the transaction / other event, (iii) terms of comparable transactions / other events, (iv) selection of a comparable geographical area and (v) the business strategy applied;

c) Justification for a one-year / multiple-year data study;

d) Indication of financial data / indices used in the benchmark study;

e) Information on adjustments made to eliminate differences between the tested transaction / event and comparative data (and justification for such adjustments);

f) Determination of the market price / range;

g) Reasons for failure to provide information under items B-F (where it is not necessary to use such information in the study).

As regards the benchmark study, the regulation shall be read in conjunction with Article 9a.2c of the CIT Act, which provides that the benchmark study shall include comparable data on entities based or managed in the territory of the Republic of Poland, if the taxpayer has access to such data.

Explanatory statement to the regulation

III. The Master File

As regards the Master File, the regulation specifies in particular:

a) Information on the organizational structure of the group (the documentation should specify, among others, the name, registered office and description of relations);

b) The pricing policy (the group documentation should present the pricing policy for services, intangibles and R&D deliverables, financing of intercompany operations);

c) The business and activities of the group, including information on (i) business factors that affect profits, (ii) major added value chains and functional profiles of related parties in such a chain, (iii) services provided under such added value chains, (iv) geographic markets which generate at least 10% of profits in individual added value chains, (v) business restructurings, mergers, acquisitions and disinvestments made during a year;

d) Description of significant intangible assets of the group, including: (i) the strategy of developing, enhancing, maintaining, protecting and exploiting intangible assets, (ii) major R&D centers in the group (based on number of FTEs), (iii) entities that manage R&D operations, (iv) the list of group’s intangible assets that affect intercompany transaction pricing and the holders of title to such assets, (v) intercompany R&D contracts / agreements and license agreements, (vi) information on a change in holders of titles to / managers of group’s intangible assets;

e) The group’s financial standing, including a list of borrowings (equivalent to over 5% of group’s borrowings).


An additional element introduced to the final version of the regulation is a glossary that defines six key terms. i.e.:

  1. party to a transaction or other event,
  2. functional analysis,
  3. value added chain,
  4. significant value added chain,
  5. functional profile,
  6. qualities of goods, services or other benefits.

Changes to the draft regulation

The text of the regulation was changed mainly as a result of comments received in the course of public consultations on the draft regulation. Most of those changes clarified selected issues and to some extent limited an administrative burden imposed upon a taxpayer (e.g. provisions that required to compare changes in the course of transactions against the previous year were withdrawn).


The implementing regulation on information included in tax documentation presents an extensive list of detailed elements of the documentation.

The regulation provides that the elements of tax documentation will have to present detailed information on the business of a taxpayer and the group it is a member of. In order to satisfy the requirements imposed upon by the legislation, the elements of a benchmarking analysis to justify the prices applied will also require a significant labor input.

Documents can be found on the Internet at the following addresses (in polish language version):

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