Poland: Implementing decrees, transfer pricing - KPMG United States
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Poland: Implementing decrees, transfer pricing regulations

Poland: Implementing decrees, transfer pricing

The Minister of Finance in late December 2018 issued decrees that generally implement the amended transfer pricing regulations. The new regulations are effective for transactions conducted in 2019, but taxpayers may elect to apply the measures for controlled transactions conducted during 2018.

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The implementing decrees specify:

  • The elements of domestic (local) transfer pricing documentation and taxpayer group transfer pricing documentation
  • The scope of data and information to be provided in transfer pricing information documents and explanations about how to prepare such information
  • The manner for determining compliance of certain conditions of transactions with related entities 

Safe harbour in relation to interest on loans in 2019

The Minister of Finance in December 2018 announced the base interest rate and the margin for transfer prices purposes. The announcement is related to the introduction of the so-called “simplified settlement rules” (or safe harbour) with regard to loan transactions (as well as credits or bonds) as concluded between related entities. If the taxpayer meets certain conditions of the transaction, including setting the interest rate of the loan on the day of the agreement, based on the base interest rate and the margin specified in the announcement (as of the date of the agreement), the tax authority will waive the determination of taxpayer's income (loss) in the scope of the interest rate on this loan. The safe harbour will be available for income (revenues) from 1 January 2019.

The Minister of Finance specified five types of base interest rates for five different currencies which increased by a margin of 2 percentage points; set acceptable levels of interest rates (maximum level for the borrower and minimal level for the lender); and allowed for the use of the safe harbour. If the value of the base interest rate is less than zero, the acceptable margin will be the sum of the absolute value of the base interest rate and 2 percentage points.

List of tax havens to be announced soon

With regard to new regulations in the field of transfer pricing, the Minister of Finance is expected to issue a decree specifying the list of countries and territories applying harmful tax competition.

 

Read a January 2019 report [PDF 289 KB] prepared by the KPMG member firm in Poland

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