The Ministry of Finance on 11 March 2019 issued “explanations” to clarify the treatment of transfer pricing adjustments made in 2019, concerning transactions or other events occurring in 2018.
The authorities also addressed the rules for submitting information about transfer prices on ORD-U form for 2018.
These explanations are part of the Ministry of Finance’s focus to help and enable taxpayers to correctly apply the new transfer pricing regulations (rules that were effective beginning 1 January 2019).
New regulatory provisions concerning transfer pricing adjustments introduce a number of conditions that taxpayers must satisfy, especially with regard to adjustments that would reduce tax liability (reduce revenue or increase tax deductible costs). Satisfying these conditions is connected to a taxpayer's right to recognize adjustments for transfer pricing.
According to the Ministry of Finance, the new transfer pricing regulations regarding transfer pricing adjustments (effective 1 January 2019) are applicable for transactions commencing after 31 December 2018.
The Ministry of Finance explained that transfer pricing adjustments made in 2019, and concerning transactions or other events in 2018, are to be recognized in the tax books for 2019 (that is, under the rules effective until the end of 2018). According to the explanations from the Ministry of Finance, the “retroactive” inclusion of transfer pricing adjustments will apply for adjustments relating to transactions conducted after 1 January 2019.
The Ministry of Finance also clarified that an “exemption” from having to file the ORD-U form to report information about agreements concluded with non-residents refers to ORD-U information submitted for 2019 only. The exemption from having to file ORD-U is available because of a repeal of a requirement, and is effective 1 January 2019.
Thus, when submitting the ORD-U information, taxpayers must apply the provisions that were in effect for the tax year when the information is submitted. Also, taxpayers required to file a corporate income tax return or individual income tax return with transfer pricing information are “exempt” from the requirement to file the ORD-U form for 2018.
Read a March 2019 report [PDF 293 KB] prepared by the KPMG member firm in Poland
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