October 2023

Transfer Pricing in Poland

Polish transfer pricing regulations are based on the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. When it comes to related entities, the arm’s length principle requires transactions to be priced as if they were carried out between unrelated entities.

Definition of related entities

Polish transfer pricing regulations define related entities as those having a direct or indirect relationship that involves exerting significant influence. This can take any of the following forms:

  1. Holding – directly or indirectly – at least 25%  of capital, voting rights, shares, or rights to participate in profits;

  2. Having the actual ability to influence key economic decisions of a given entity; or

  3. Being married or closely related.

Local file

Related entities are required to prepare local transfer pricing documentation known as a local file. This obligation applies to transactions of a homogeneous nature whose value in a given tax year amounts to at least:

  1. PLN 10 million (approx. EUR 2.2 million) – in the case of commodity and financial transactions; or

  2. PLN 2 million (approx. EUR 440,000) – in the case of service and other transactions.

Polish regulations allow for certain exemptions from the obligation to prepare local transfer pricing documentation. For example, if statutory conditions are met, loans and low-value-adding services may fall under the simplified “safe harbour” regime.

Transactions with tax havens

The obligation to prepare local transfer pricing documentation may also arise with respect to transactions with related and unrelated entities whose registered office, or management board, is based in a tax haven. For such transactions, the documentation thresholds are as follows:

  1. PLN 2.5 million (approx. EUR 550,000) – in the case of financial transactions;

  2. PLN 500,000 (approx. EUR 110,000) – in the case of other transactions.

Homogeneous transactions

The statutory documentation thresholds apply to transactions of a homogeneous nature. If a given entity has carried out several homogeneous transactions with different entities, their values should be summed up to see whether the total exceeds the applicable thresholds.

When assessing the nature of transactions, particular attention should be paid to their economic uniformity, transfer pricing verification methods, and transaction details. Examples of homogeneous transactions include providing the same service to several related entities or executing several loan agreements with the same related entity.

Calculating transaction value

The following should be taken into account when calculating the value of a transaction:

  1. Value of capital – in the case of a loan or deposit;

  2. Nominal value – in the case of issuing bonds;

  3. Guarantee amount – in the case of a surety or guarantee;

  4. Value of revenues or costs – in the case of income (loss) attributed to a foreign permanent establishment;

  5. Value of contributions made to a partnership; and

  6. Appropriate value – in the case of other transactions.

The value of the transaction should be determined based on the following:

  1. Invoices received or issued for a given tax year;

  2. Contracts or other documents (in the case of financial transactions); and

  3. Payments received or transferred (where it is impossible to determine the value based on invoices, contracts, and other documents).

Components of a local file

According to Polish regulations, local transfer pricing documentation must contain certain essential components. These include information about the related entity, transaction details, an analysis of functions, assets, and risks (FAR), and financial data about the transaction.

As of 2019, all local files must also include a transfer pricing analysis, which may take the form of a benchmarking or compliance analysis (where a benchmarking analysis is not feasible).

Transfer pricing information

Entities required to prepare local transfer pricing documentation must also file transfer pricing information with the competent tax office.

The TPR-C form used for this purpose must provide details about related entities and controlled transactions, including the transfer pricing method used and the analysis results.

Effective 2022, the TPR-C form contains a statement to the effect that local transfer pricing documentation has been created and transfer prices have been established at arm’s length. Previously, such statements had to be made separately. The TPR-C form may be signed by a designated member of the company’s management board.

Master file

In some cases, in addition to preparing local documentation, related entities must also provide group transfer pricing documentation known as a master file.

This obligation applies to related entities forming a group which prepares consolidated financial statements, provided that their consolidated revenues in the previous financial year amounted to at least PLN 200 million (approx. EUR 44 million).


The deadline for preparing local transfer pricing documentation expires at the end of the 10th month after the end of the tax year in which transactions with related entities were carried out. The deadline for providing the group documentation expires at the end of the 12th month after the end of the tax year. Transfer pricing information (TPR-C) should be filed by the end of the 11th month after the end of the tax year.


Polish regulations provide for various sanctions in case an entity fails to discharge its transfer pricing obligations:

  1. CIT arrears – If the tax authorities conduct an inspection and find that a transfer price was not set at arm’s length, the entity will have to pay overdue corporate income tax (CIT) with penalty interest;

  2. Additional tax liability – The tax authorities may impose an additional tax liability amounting to 10% of the reported or overstated tax loss or understated income. If local transfer pricing documentation is not prepared, this sanction is doubled (up to 20% of the overstated loss or understated income), and may even be tripled in some cases;

  3. Fiscal criminal sanctions – Under the Fiscal Criminal Code, entities may face a fine of up to 720 daily rates (equivalent to over PLN 33 million) for failing to submit a TPR-C form, submitting a TPR-C form with inaccurate information, not preparing transfer pricing documentation, or preparing transfer pricing documentation that contains inaccurate data.

Advanced Pricing Agreements 

The Polish provisions allow entities to enter into Advanced Pricing Agreements (APAs) with a Head of National Tax Administration. This is a type of agreement between the taxpayer and the tax authority in which the tax authority approves the selection and application of the transfer price verification method used between the taxpayer and its related parties. APAs can be in force for up to 5 years. APAs are an effective instrument to reduce the risk of incorrectly determined transfer prices and their questioning by the tax authorities.

Transactions below the threshold

Although Polish regulations set statutory thresholds for transactions between related entities that should be documented for tax purposes, the above sanctions may be imposed regardless of whether the annual value of transactions exceeds those thresholds. The key is to remember that the arm’s length principle applies to all transactions between related entities, regardless of their annual value.