Save article




Poland significantly revises transfer pricing law from 1 January 2019

Executive summary

From 1 January 2019, Poland has incorporated significant changes to its transfer pricing (TP) law, including documentation rules which were already significantly amended in 2017.

The implemented changes seek to reduce the administrative burden imposed on taxpayers by increasing documentation thresholds and introducing “safe harbors.” However, at the same time, the law grants broader powers to tax authorities in the area of assessing the merits of transactions between related parties and validating the applied TP approach, which may make TP audits in Poland more challenging.

Detailed discussion

Key changes in TP documentation

The law now contains the following key changes:

  • The definition of related parties is redefined, broadening the scope of settlements which may be subject to arm’s-length verification
  • New, increased documentation thresholds as follows:
    • PLN10 million (approx. US$2.7 million) in the case of transactions involving goods and financial transactions
    • PLN2 million (approx. US$0.55 million) in the case of service and other types of transactions
  • The obligation to prepare Master File documentation is revised so that taxpayers are obliged to prepare a Master File only if all of the following conditions are met:
    • The entity is required to prepare local documentation
    • The entity belongs to the group of related entities for which consolidated financial statements are prepared
    • Consolidated revenues of the group exceeded PLN200 million (approx. US$50.4 million) in the previous financial year

The law provides for the possibility of preparing the Master File documentation in English though tax authorities have the right to request a Polish version of the document.

  • New deadlines for the preparation of documentation are:
    • Local File: 9 months from the end of the tax year
    • Master File: 12 months from the end of the tax year
  • The law replaces the corporate income tax/personal income tax TP form with a new TP-R electronic document
  • The law includes several exclusions from the documentation requirement for local transactions
  • Management’s responsibility for the arm’s-length character of the TP policy has been expanded

It is important to note that for 2018, companies may elect to follow the 2017 or 2019 regime.

Introduction of safe harbor rules

The new law has introduced safe (recognized by the tax authorities as market) margin rates for low value-added services at the minimum level of 5% for the provision of services and a maximum of 5% for the purchase of services.

Although the application of these rates exempts the taxpayer from the benchmarking requirement for those transactions, the use of the safe harbor is only possible if the taxpayer has a broad calculation presenting information on the type and amount of costs included in the calculation, as well as the use of allocation keys for all entities using a given low value-added service.

A similar solution has been introduced for certain loans. If the interest rate on the loan is determined on the basis of the base interest rate increased with margin as determined in the decree published by the Ministry of Finance, after fulfilling certain requirements on the period and value of the loan, taxpayers will be able to benefit from the safe harbor rules.

Changes in the tax authorities competencies in the area of TP

The law also has introduced the right of tax authorities to
re-characterize or not recognize a transaction under particular circumstances.

In addition, the catalog of TP methods that can be used by tax authorities for the purpose of establishing the arm’s-length nature of a transaction was expanded, giving them the right to use valuation techniques.


The law is in line with the current tax authorities’ policy to reduce the administrative burden for taxpayers, while increasing the tax auditing competencies and rights of the tax authorities indicating that the priority for taxpayers should be to determine appropriate arm’s-length TP policies, which may be subject to tax audit.

EYG no. 000189-19Gbl

Download this Tax Alert as a PDF file.

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.



Font size

Tax topics >

No filter criteria selected.

Industries >

No filter criteria selected.

Countries >

No filter criteria selected.

 < Close


 < Close


 < Close

Tax topics

 < Close


 < Close


 < Close

0 articles have been saved