As a part of public consultations on the draft amendment of transfer pricing regulations, numerous comments and proposals were submitted, to which the Ministry of Finance responded in a report issued on 27 August this year.

One of the proposals submitted several times is the exemption from the documentation obligation of transactions carried out between national entities. The Minister of Finance, Prof. Teresa Czerwińska, in an interview given to the portal, bearing in mind the willingness to engage in dialogue and cooperation with taxpayers, takes a positive view of the proposed change and announces its introduction.

As a result of the introduction of this solution, only transactions with foreign entities would be subject to documentation requirements. It should be stressed that the exemption will certainly not be unconditional.

The proposed criterion for benefiting from the exemption would be the taxpayer’s income. Entities generating losses would still be obliged to prepare transfer pricing documentation.

The effect of the amendment would be a significant reduction of documentation obligations. It should be stressed that the draft has now completed the stage of public consultations, and the final shape of the introduced change will be known only after publication of the updated version of the draft act.

The discussed report from public consultations is available on the website of the Government Legislation Centre:  number UD405.

Author: Paula Arciszewska – Senior tax consultant