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
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.