When is a Master File required?
Group transfer pricing documentation (Master File) constitutes one of the elements of transfer pricing documentation. In practice, it is most often a separate document, typically rather extensive, prepared by the headquarters of the corporate group. The Master File contains key information on the entire group of related entities, including, inter alia, its business profile, owned intangible assets, financing arrangements, and the applied transfer pricing policy.
A Polish taxpayer is obliged to possess a Master File if the following conditions are jointly met:
- the taxpayer belongs to a group of related entities for which consolidated financial statements are prepared;
- the entity’s financial statements are consolidated using the full or proportional method;
- the consolidated revenues exceeded PLN 200 million (or the equivalent amount) in the preceding financial year.
By when should the Master File be available?
The group documentation should be attached to the local transfer pricing documentation no later than by the end of the 12th month following the end of the tax year. For taxpayers whose tax year coincides with the calendar year, the deadline for preparing the Master File for 2025 expires on 31 December 2026.
Who can prepare the Master File?
In practice, this document is typically prepared by the group headquarters and made available to the companies belonging to the group. However, it should be noted that the responsibility for maintaining complete documentation compliant with Polish regulations rests with the Polish taxpayer.
This means that if the group does not provide the Master File or if the document provided does not contain all elements required under Polish regulations, the obligation to supplement or prepare it remains with the Polish entity. The argument that the document has not been provided by the headquarters does not release the taxpayer from its documentation obligations.
Can the Master File be prepared in a foreign language?
Polish regulations allow the Master File to be maintained in English. However, the tax authorities may request a Polish translation. Based on our experience, every tax audit in which group documentation was verified involved a request for submission of a Polish-language version of the document.
Why is it worth verifying the Master File in advance?
The Master File is not merely a formal appendix to the Local File. It is a document containing detailed information on the group’s business model, the functional profiles of entities, and the transfer pricing setting mechanisms. Therefore, we recommend that the document be made available to the Polish entity sufficiently in advance to ensure consistency between local and group documentation.
Providing it in advance (rather than during a tax audit) also allows for verification of its completeness against Polish requirements. Early analysis of the document enables identification of potential deficiencies and their remediation.
We encourage performing a review of the Master File already at the stage of its receipt from the group. Should you have any questions or require support in assessing the compliance of the documentation with Polish regulations, we remain at your disposal.