Transfer Pricing Obligations in 2025

The deadlines for fulfilling transfer pricing obligations for 2024 are approaching. Companies whose tax year is consistent with the calendar year are subject to the following deadlines:

• 31 October – deadline for preparing Local Files;
• 1 December – deadline for submitting TPR-C information;
• 31 December – deadline for preparation of Master File.

We present a comprehensive summary of transfer pricing obligations in 2025. We would like to point out that the fiscal penal liability for transfer pricing was largely assigned to members of the company’s management boards.

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:

• PLN 10 million (approx. EUR 2.2 million) – in the case of commodity and financial transactions,
• PLN 2 million (approx. EUR 440,000) – in the case of service and other transactions.

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.

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.

Transactions with Tax Haven Entities

The obligation to prepare local transfer pricing documentation may also arise with respect to transactions with entities (including unrelated ones) whose registered office or management board is based in a tax haven. The documentation thresholds for transactions with entities from tax havens have been set at PLN 2.5 million (for financial transactions) and PLN 500,000 (for other transactions).

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, risks, and assets, 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 that are required to prepare local transfer pricing documentation, as well as those exempt from this obligation, must also submit transfer pricing information to the competent tax office.

From 2022, the TPR-C form additionally contains the entity’s 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 can be signed by a designated member of the company’s management board.

Transfer pricing information should be filed by the end of the 11th month after the end of the tax year.

Master File

In the case of related entities forming part of a group which prepares consolidated financial statements and whose consolidated revenues in the previous financial year amounted to at least PLN 200 million (approx. EUR 44 million), there is also an obligation to prepare group transfer pricing documentation known as a master file.

The deadline for providing the group documentation expires at the end of the 12th month after the end of the tax year.

Sanctions

Polish regulations provide for various sanctions if 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) on the understated income, with penalty interest;
2. additional tax liability – the tax authorities may impose an additional tax liability amounting to 10% of the understated income or overstated tax loss. If local transfer pricing documentation is not prepared, this sanction is doubled (up to 20% of the understated income/overstated loss) 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 40 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.

How can we help you?

We have extensive experience in offering transfer pricing tax guidance. Every year, we prepare dozens of transfer pricing files for entities operating under a broad range of business models and representing a wide variety of industries (with a focus on real estate, logistics and IT). Our team has created an original model for verifying the market nature of M&A transactions, and we have a proven track record of representing our clients in transfer pricing disputes with tax authorities and before administrative courts.

You can count on us to provide comprehensive transfer pricing advice, leveraging our considerable expertise in this field. In particular, we can:

• analyze your transactions with related entities,
• indicate potential risk areas,
• identify your documentation obligations,
• prepare transfer pricing documentation for you, and
• prepare your transfer pricing information (TPR-C).

For a detailed analysis, or even a quick check, get in touch with our Head of Tax Piotr Prokocki.