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 deadline for preparing the Local File and submitting the TPR form was 9 months from the end of the tax year. However, for 3 years in a row the lawmaker kept extending it due to the COVID-19 pandemic. For taxpayers whose financial year matches the calendar year, the deadline for preparing the Local File expired on 31 December 2022. However, a significant proportion of taxpayers have a financial year different from the calendar one. For them, the deadline in ‘non-covid’ circumstances would have expired between 30 September and 31 December 2022 yet has been postponed by 3 months. A number of entities have the financial year ending on 31 March, which means that the deadline for preparing the Local File, submitting the TPR form and the statement on having prepared transfer pricing documentation for the year 2021/2022 will expire on 31 March 2023.

Master File

We addressed the obligations related to the preparation of the Master File in one of our recent posts. As a reminder: the Master File is required from entities belonging to a corporate group which prepares consolidated financial statements and whose consolidated turnover in the previous financial year exceeded PLN 200 million (or the equivalent of this amount). The Master File contains cross-sectional information about the corporate group as a whole, with particular emphasis on intra-group transactions significant from the group perspective. Since compiling the Master File often requires cooperation with foreign related entities, we advise you not to leave wait until the last moment. Also, please note that the members of the management board may face penal fiscal consequences for missing the Master File:

• up to approx. PLN 33.5m – in the case of failure to prepare the Master File or preparing it not in accordance with the facts, or
• up to approx. PLN 11.2m – for preparing the Master File after the deadline.

CBC-P

A taxpayer from a corporate group whose consolidated revenues in the previous financial year exceeded PLN 3.25 billion or EUR 750 million (or the equivalent of this amount in another currency) should file the CBC-P notification (we covered this obligation in more detail in this entry). This notification names the entity from the corporate group that files information on the group of entities in its country, i.e. the CBC-R. The CBC-P notification itself is not a complicated document, but failure to submit it may trigger severe financial penalties: a taxpayer who has failed to file within the statutory deadline (3 months after the end of the financial year, i.e. 31 March 2023 for most entities) may be charged with a fine by the Head of KAS in the amount of up to PLN 1 million.