Transfer pricing – thresholds 2024

The year 2024 has not introduced any major changes to transfer pricing regulations. However, related parties must still carefully comply with documentation and reporting obligations for intra-group transactions made in 2023.

The process begins with identifying relationships as defined by transfer pricing regulations. The next step is determining whether the transactions qualify as controlled transactions and ensuring their value is correctly assessed in relation to statutory thresholds.

What are the transfer pricing thresholds in 2024?

Transfer pricing documentation must be prepared for homogeneous transactions that exceed specified values:

• PLN 10,000,000 – in the case of financial transactions and transactions involving the sale or purchase of products, goods, materials, etc.,
• PLN 2,000,000 – in the case of services and other transactions, e.g. capital transactions,
• PLN 2,500,000 – in the case of financial transactions concluded with entities from so-called tax havens (related or unrelated),
• PLN 500,000 – in the case of non-financial transactions with entities from so-called tax havens (related or unrelated).

Under the current legislation, the obligation to prepare transfer pricing documentation depends solely on the value of transactions between related parties and the applicable statutory thresholds. The scale of the company’s activities is not a factor.

How to determine controlled transaction value?

Documentation thresholds are determined separately for:

• each controlled transaction of a homogeneous nature, irrespective of its allocation to goods, financial, services, or other transactions,
• the cost side and the revenue side.

The value of a controlled transaction of a homogeneous nature is determined irrespective of the number of:

• accounting records,
• payments made or received, and
• related parties with whom the controlled transaction is entered into.

How to assess the homogeneity of a transaction?

According to the general interpretation issued by the Minister of Finance, consider the following:

• the economic homogeneity of the controlled transaction,
• comparability criteria,
• transfer pricing verification methods, and
• other relevant circumstances of the controlled transaction.

How to determine whether a controlled transaction exceeds the documentation thresholds?

The first step is to accurately determine the value of the transaction, which will depend on the type of transaction involved.

You determine the value of the controlled transaction on the basis of:

1. invoices received or issued for the relevant tax year; or
2. contracts or other documents – if no invoice has been issued or in the case of financial transactions, or
3. payments received or made – if it is not possible to determine this value on the basis of points 1 and 2.

Has your company identified transactions subject to transfer pricing regulations? The first step is to review the settlement values and determine whether the controlled transactions exceed the statutory thresholds.

What are the consequences of exceeding the materiality threshold (limit)?

The consequences of exceeding the materiality threshold can be significant for enterprises engaged in transfer pricing. Companies must prepare comprehensive transfer pricing documentation to demonstrate compliance with transfer pricing rules.

So, you have the obligation to:

1. Prepare local transfer pricing documentation, including a transfer pricing analysis; and
2. Report the transaction using the TPR form.

Summary

The first step in accurately identifying transfer pricing obligations is to define the controlled transaction and determine its value. It is equally important to correctly complete and submit the TPR form, as this form serves as the primary source of analytical data for the tax authority regarding the taxpayer and the terms of the transactions. Transfer pricing thresholds are a critical factor in ensuring proper compliance for related party transactions.

Need support or additional information? We are happy to share our expertise. Please contact us to learn how we can help your company effectively manage its transfer pricing obligations