The CIT Act-introduced transfer pricing regulations target primarily controlled transactions made between related entities. However, not everyone is aware that they also apply to transactions with third parties having their registered office or management in the territory or in a country applying harmful tax competition, i.e. the so-called tax haven entities. The topic of tax…
Documentation obligation not triggered by the redemption of shares – another favorable decision by a District Administrative Court Redemption of shares in a company is an institution governed by the Code of Commercial Companies and Partnerships (KSH). It has been disputed between taxpayers and tax authorities from the perspective of transfer pricing obligations for several…
Type of remuneration established within transaction should reflect the functional profile The functional analysis is a key item of the transfer pricing documentation. It determines precisely the functional profile of the parties to the controlled transaction and introduces the risks involved. Consequently, it supports determining the arm’s length remuneration due. An example of how a…
Which transactions are not subject to documentation obligations? There are transactions or activities between related entities that may at first glance imply transfer pricing obligations. They are actually not controlled transactions in the context of TP regulations. Since Local File is compiled for a ‘controlled transaction’, you should verify that the business event in question…
To document a loan, or not, that is the question! Financial transactions are among the most frequently documented transactions taxpayers make with related parties. In fact, they accounted for over 40% of the reported transactions according to the TPR-C forms filed for 2019. Due to the discrepancies following the interpretation of the CIT Act in…
Another exemption unavailable for tax haven transactions Taxpayers for the first time need to identify possible transfer pricing obligations resulting from the so-called Indirect Tax Haven Transactions. The matter still raises a number of doubts. One of them was highlighted in the individual tax ruling of 15 June 2022 (ref. no. 0111-KDIB1-2.4010.676.2021.1.DP). Determining obligations triggered…
Authorities must also exercise diligence while preparing benchmarking analyses When preparing benchmarking analyses in the course of audits, tax authorities should perform them as diligently as is expected of taxpayers. Such conclusions follow from the ruling of the Supreme Administrative Court of 29 June 2022 (II FSK 3050/19)[1]. It dismissed the cassation appeal of the…
A benchmarking analyses is a key part of the transfer pricing documentation – it confirms the arm’s length nature of intra-group transactions. It is an important tool for taxpayers and tax authorities. The latter can use it to examine the arm’s length nature of transaction terms agreed between related entities. Do the authorities always correctly…
The National Revenue Administration (KAS) has released the latest statistical data on APAs. Briefly: in Q1 2022, only 14 advance pricing agreements were made (all of them unilateral). Although a record was broken in 2021 for the number of agreements made (101), the data for Q1 2022 are not optimistic. Progress – based on data…
TP documentation obligations: more than Local File and TPR or the Master File explained. For many taxpayers transfer pricing is only about compiling Local File or filling in the TPR form. From 2022, the so-called indirect tax haven transactions also trigger some obligations. There are still more questions than answers in this respect. Our focus…