Q1 2023 is coming to an end and taxpayers have already familiarized themselves with the changes brought in by the new year in the area of transfer pricing. The key one are shortened documentation and reporting deadlines, but apart from that, a number of seemingly minor changes were introduced at the beginning of the year.…
End of Q1 2023 – what obligations must be met? For most taxpayers operating in corporate groups the end of March 2023 is associated with the deadlines for meeting the last transfer pricing obligations. Some of them still apply to 2021. TPR for companies with a shifted tax year As a rule, in previous years…
The instrument of recharacterization and non-recognition of transactions was introduced to the transfer pricing regulations on 1 January 2019. Tax authorities may decide that in comparable circumstances third parties would not have made a given controlled transaction or would have entered into a different transaction (the so-called ‘proper transaction’). If that is the case, the…
Janina Fornalik of MDDP explains recent changes to, and potential problems with, the proposed mandatory e-invoicing system in Poland and why businesses should already be preparing for its implementation. A European Council derogation decision allowed Poland to introduce a mandatory e-invoicing system starting from January 1 2024 and draft regulation stated this date. However, according…
Today we are addressing formal conditions to be met only in the case of in minus adjustments. Condition 3: TP adjustment in the books of both transacting parties The taxpayer must have a statement from a related entity or an accounting evidence confirming that the entity made the TP adjustment in the same amount as…
Correctly classifying a brokerage transaction has certainly not been intuitive for taxpayers. Making such transactions between related entities adds complexity to the matter. The challenge for the taxpayer is both determining the value of such a transaction and establishing the appropriate documentation threshold for it under transfer pricing regulations. This may result in the taxpayer’s…
In a recent blog entry we wrote that according to the position of the tax authorities, the choice of a simplified form of taxation (the lump sum on the income of companies called Estonian CIT) does not exclude the application of transfer pricing regulations. At the same time, we highlighted doubts and practical problems that…
In the regulations is lack a definition of a transfer pricing adjustment (TP adjustment). However, it can be concluded based on the Clarifications of the Ministry of Finance that the purpose of a TP adjustment is to adjust (correct, amend) a transfer price to the level in line with the arm’s length principle in a…
Identifying documentation obligations is a key step in completing the tasks imposed by the transfer pricing regulations. Under the applicable regulations, the concept of a controlled transaction should be interpreted broadly. As a consequence, a number of business activities that are seemingly not subject to transfer pricing regulations may in practice trigger documentation obligations. An…
In connection with the preliminary agreement reached on 14 December 2022 between the European Commission and the European Parliament regarding the Carbon Border Adjustment Mechanism (CBAM), changes were introduced to the draft regulation that extend the scope of goods covered and the starting date. According to the current draft, the reporting regulations will apply from…