Transfer pricing documentation obligations for 2023: deadlines are looming

Transfer Pricing: obligations await!

The holidays are coming to an end, and as children head back to school, businesses must also turn their attention to fulfilling transfer pricing obligations for the 2023 tax year.

Key deadlines are approaching for:

• Local transfer pricing documentation (Local File)
• Transfer pricing information (TPR)
• Group transfer pricing documentation (Master File)

In 2024, these deadlines will arrive faster than ever. To avoid stress and potential penalties, it’s crucial to prepare and take action now.

Local File: start preparing without delay

You must prepare your Local File for the 2023 tax year by October 31, 2024. This is the final call to prepare documentation for related party transactions.

Keep in mind that you are required to submit the documentation within 14 days of a request from the tax authority. This can be quite challenging if the documentation for the previous tax year is still being prepared.

Transfer pricing information (TPR) – keep an eye on deadlines

The deadline for submitting the TPR form for the 2023 tax year (Transfer Pricing Information) is also fast approaching: November 30, 2024.

In this form, you provide key information on intercompany transactions, making it one of the most important documents to submit on time. Tax authorities will immediately notice its absence. The TPR form must be prepared with the utmost care, as it serves as the basis for authorities to select entities for transfer pricing audits. Every detail matters.

Master File – group transfer pricing documentation

A taxpayer from a group with a consolidated turnover of more than PLN 200 million in the previous fiscal year is also required to have group transfer pricing documentation (Master File).

The deadline for attaching it to the Local File for 2023 is December 31, 2024. Preparing this documentation may require cooperation with foreign entities, so it’s important to start work now to avoid stress and delays.

How to obtain the Master File?

Polish taxpayers typically receive group transfer pricing documentation (Master File) from their parent company. For several years now, the Master File can be prepared in English, a Polish translation is required only upon request by the authorities.

This approach simplifies the process of meeting the obligation. The taxpayer only needs to ensure that the information in the 2023 Master File aligns with Polish regulations and, crucially, with the data presented in the Local File. Providing authorities with two documents containing contradictory information during an audit can raise serious concerns and attract significant scrutiny from auditors. 

If an entity required to prepare Master File documentation has not yet received it from the group, it should begin the process as soon as possible. Gathering all the necessary information about the group by the end of 2024 can be a challenging task. Our tax advisors are here to guide you through the entire process, from start to finish.

Consequences of failure to meet obligations

Failure to comply with documentation and TPR obligations in 2024 may result in sanctions, including criminal penalties. Liability extends not only to the taxpayer (with the risk of overestimating tax liabilities) but also to individuals responsible for the taxpayer’s transfer pricing, particularly Board Members, though not exclusively.

Among other things, you face consequences for:

• Failure to prepare Local File and Master File, or submit the TPR form,
• Submitting false information to authorities in the TPR form, Local File, or Master File documentation,
• Submitting Local File and Master File, or the TPR form, after the deadline.

There are numerous negative consequences for failing to comply, so it is essential to address the topic of transfer pricing well in advance.

Summary

As the vacations come to an end, it’s time to focus on completing your TP obligations and making sure the arm’s length principle is met. Deadlines are quickly approaching to:

1. Prepare local transfer pricing documentation (Local File)
2. File transfer pricing information (TPR)
3. Prepare group transfer pricing documentation (Master File).

Failure to meet these obligations can lead to serious consequences. Don’t delay—start preparing now.

Do you have questions about deadlines? Need clarity on reporting requirements? Looking for support in preparing your documentation? Contact our experts. We guarantee efficient advice and assistance in meeting all obligations on time.