Transfer pricing documentation-planned revolution
The provisions shall enter into force on 1 January 2019 of the year and shall apply to transactions carried out in the tax year beginning after 31 December 2018 of the year. The project also allows the application of new rules for transactions commenced after 31 December 2017 year.
Amendment of the definitions of related parties-the related parties shall be deemed to be entities of which one entity exerts a significant influence on at least one other entity. Raising of documentation thresholds, beyond which the obligation to produce transfer pricing documentation is made. The mechanism for determining the thresholds is also changed – a threshold is planned to be set, in principle, at 10 million PLN for commodity transactions and debt financing and PLN 2 million for intangible and other transactions. The proposed changes would come into effect on 1 January 2019 of the year. Introduction of new conditions for the preparation of Masterfile documentation-the Masterfile will be required by taxpayers required to make local transfer pricing documentation belonging to the Group of related parties: a) for which the consolidated financial statements are drawn up, b) whose consolidated income exceeded in the preceding financial year the amount of PLN 200 000 000 or its equivalent. Extension of the time limit for making a declaration on the preparation of local transfer pricing documentation and the submission of transfer pricing information from 3 to 9 months after the end of the tax year. At the same time, the time limit for drawing up group transfer pricing documentation will be 12 months after the end of the tax year.
July 17, 2018 published draft changes to CIT and PIT laws
The proposed changes imply a partial modification of existing duties. The published draft also introduces new responsibilities for reporting transactions with related parties.
What else is to change?
Rewarding services with low added value-if the remuneration is not more than 5% of the cost (if purchased) and not less than 5% of the cost (if provided), the authorities will waive the determination of the amount of overhead. The authorities shall waive the determination of interest rates on loans between related parties if:
- Their interest rate will be determined on the basis of the type of base interest rate and the margin set out in the Minister of Finance's notice,
- No additional lending fees are foreseen,
- They have been granted for a period of not more than 5 years and
- The sum of the loans granted and the loans received from related entities (level counted separately) is not more than PLN 20 million.
Introducing the possibility of zreazlizowaniaing the obligation to have a group transfer price documentation by using directly the documentation produced by another entity in the group, including in English, while The obligation to documentation entities which receive such documentation from the group.