Poland: Transfer pricing changes included in draft bill

Poland: Transfer pricing changes included in draft bill

A draft bill added on 4 September 2020 to the legislative agenda includes measures that would amend the transfer pricing rules.


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The proposed measures generally concern corporate income tax and individual (personal) income tax laws and would be intended to “tighten up” the Polish tax systems. There are expectations that the proposals could be passed by the Council of Ministers in the third quarter of 2020.

One of the key proposals would make the amount of tax paid by the largest entities, especially multinationals, dependent on the place where the income is actually earned. Concerning transfer pricing, the draft bill would revise the transfer pricing regime by:

  • Extending application of the arm's length principle in instances when the beneficial owner is located in a “tax haven” jurisdiction
  • Expanding the scope of documentation obligation for such transactions
  • Revising the rules on the sources of income earned by non-residents in Poland, and adjusting the standards set out by income tax treaties as amended by the Multilateral Instrument (MLI) or the agreement that is also known as the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”

Changes in the area of transfer pricing would also affect the rules that currently apply for making transfer price adjustments and also the rules regarding the Local file and the relevant declaration.

Read a September 2020 report [PDF 235 KB] prepared by the KPMG member firm in Poland

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