Transfer Pricing documentation

Regulations require that your associated entities must compile their own tax documentations. If such tax documentations are prepared properly, you are secured against penalty tax rates, and you can better justify your particular transactions and their free market viability. So, how can we help you in this area?

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Benchmarking

Benchmarking is not only a formal requirement but also a good way to reduce the risk of questioning transactions by tax authorities. So, what exactly does it consist in?

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Master File and transfer pricing policies

If your Company belongs to the group of related parties for which there is a consolidated financial statement compiled, and consolidated revenue of the group runs over 200 million zlotych, you should possess the group transfer pricing documentation so-called Master File. So, how can we assist you in fulfilling this obligation?

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Documentation of intangible services

Increasingly often, Polish tax authorities tend to question intangible services that are included in the company’s tax-deductible expenses. What can we do for you to avoid such situations?

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Transfer Pricing documentation

If you conclude a transaction with your associated entity, you should compile your transfer pricing documentations in a number of determined situations. Tax regulations define several obligatory components which such transfer pricing documentations must contain. We can assist you in preparing them. By working together with our professionals, the entire process will run fast and efficiently. The methodology we use will make it possible for you to square your Company’s transfer pricing area away, and to reduce the risk of questioning your Company’s prices and estimating income by tax authorities. So, what can we guarantee to you in this area?

  • We can verify if you should compile documentation for the particular transaction, and, if so, which particular transactions require such documentation to be compiled by you,
  • We can compile your Company’s tax documentation for the transactions you have concluded with your associated entities,
  • We can verify any transfer pricing documentation that you have compiled on your own, and we can conduct its tax audit,
  • We can adjust your tax documentation, which you have prepared according to the international standard, to the requirements that are in force in Poland,
  • We can write official letters addressed to Managements of your particular corporate entities with remarks and suggestions in the transfer pricing area. Although this practice is rarely encountered, we have been convinced on many occasions that it makes it much easier for our Customers to document their future transactions.

Step 1

You forward your tax statements to us, we use them as a basis to identify the transactions that require to be documented, and we send to you a list of issues to be discussed and a list of documents you should make available to us so that our work can be continued.

Step 2

During our meeting or teleconference, we discuss all the necessary matters with people responsible for the particular transactions.

Step 3

We prepare draft documentation and forward it to you for verification purposes.

Step 4

We discuss your remarks, if any, and we create the final documentation versions.

Benchmarking

Benchmarking analysis is an obligatory part of each transfer pricing documentation. Due to the fact that Polish tax authorities are authorised to estimate their taxpayers’ prices and incomes, the benchmarking analysis can also be a valuable tool used to justify them, and in this way to reduce your tax risks and to help you in determining your price or margin ranges in transactions concluded between your non-associated entities. The benchmarking study we perform is based on statistic methods and financial data from the market. We conduct it in accordance with the methodology as defined in the OECD transfer pricing guidelines and regulations issued by the minister competent for public finance.

Step 1

We discuss your needs, and then we carefully examine the unique nature of your business and your industry, and we identify the entities running business activities that are comparable to the ones that have been specified by you.

Step 2

We use well-reputed databases to acquire the necessary data about comparable entities, and then we select the ones that should be examined so that our benchmarking study can be of the highest possible practical value for you.

Step 3

We carefully examine selected entities’ financial results, taking account of, inter alia, their interquartile range calculations.

Step 4

A summary of our reviews and practical conclusions is presented to you in our report.

Master File and transfer pricing policies

If you are a Polish parent company of a corporate group, you must prepare a Master File document for the entire Group. On the other hand, if you are part of a foreign corporate group, you should receive such a document from your Group. Unfortunately, it frequently happens that the Master File is not delivered, or that its contents fail to correspond to Polish requirements. Therefore, it can become necessary for you to prepare your own version of such a document, which, however, is time- and labour-consuming, and, above all, requires specialised expertise. And this is exactly where we can come to your assistance.

Step 1

We send to you a list of required documentation and information that is necessary for us to compile your Master File. We also verify if such a document was created at the group’s head office level, and, if it was, then we check if it can be passed on to the Company.

Step 2

We hold a meeting with you or representatives of subsidiaries indicated by you, so that we can acquire all information that is necessary for the entire process to be run properly.

Step 3

You, or your particular subsidiaries, forward all the necessary information and documents to us; we collect and analyse them, and, in case we have to do with the Group Master File, we verify whether or not such Group Master File actually contains all the components that are required.

Step 4

Based on the information we have received, we compile a draft Master File for you and we send it to you. Then, we discuss your remarks, if any, and we prepare the final version of your group documentation.

Documentation of intangible services

Since intangible services are relatively more tax-sensitive than regular goods transactions, we support our Customers in the difficult task of collecting documents which confirm that such intangible services have been completed in order to defend the taxpayer, i.e. the task of compiling the so-called defence file. This is important, as, in many cases, tax authorities strive to classify the expenses that have been incurred, for instance, for management services as not constituting tax-deductible expenses. Nevertheless, it is often the case that such documents do exist, but they are scattered throughout the entire company, because too many people, coming not only from the Accounting Department but also from many other departments, take part in performing a given task. Together with us, you can successfully refute the allegation that relative activities were not completed or were not associated with your incomes. So, what exactly can we provide for you as part of compiling your defence file?

  • We can identify and collect documents that justify classification of the expenses you have incurred to purchase intangible services as your tax-deductible expenses,
  • We can conduct conversations with your Company’s staff in order to make them aware of benefits that can be obtained from the particular services,
  • We can raise awareness among the people who work outside the Finance and Accounting Department, and who are direct recipients of intangible services, that it is of utmost importance for all employees to collect documents which confirm that intangible services have been completed.

Step 1

You contact us by phone or e-mail, and communicate to us the need to prove that intangible services have been completed.

Step 2

We visit you at your business office in order to identify and review your Company’s materials together. During the visit, we talk to your employees as well.

Step 3

We compile for you a list of documents that prove that intangible services have been completed, and prepare a statement on benefits that your company has gained by having purchased such intangible services.

Step 4

We discuss your remarks, if any, and we prepare the final version of your defence file.