Effective from January 1, 2019 new transfer pricing regulations have been introduced in Poland.

The main purpose was to unify Polish law with international standards as described in OECD Guidelines.
Pursuant to  the CIT Act, related entities are obliged to prepare transfer pricing documentation if the value of one type of controlled transaction exceeds:

  • 10,000,000 PLN in case of transactions involving goods and financial transactions
  • 2,000,000 PLN in case of services and other transactions

Additionally,  there was introduced a Safe Harbour institution for:

  • Low value-adding services, (supporting activities enumerated in Annex no 6 to the CIT Act)
  • Loans (value is calculated including capital)

Safe Harbour means that such types of transactions are recognized by Tax Authorities as market and won’t be subject to estimation when they meet the following conditions indicated by legislator:

  • 5 % cost mark-up , (no more than 5% purchasing services , not less than 5% providing services)

The mark-up is determined applying Cost Plus Method or Transactional Net Margin Method, detailed calculations are required.

  • the interest rate is determined based on the decree of Ministry of Finance
  • the loan period must not exceed 5 years ,  there is no further remuneration agreed, the receivables/ liabilities because of loans between related parties don’t exceed 20,000,000 PLN