Apart from the key changes providing for the abolition of the obligation to document domestic transactions under certain conditions, the new transfer pricing regulations also introduce other exemptions from documentation obligations.

The new regulations provide that the obligation to prepare local transfer pricing documentation does not apply, inter alia, to the following controlled transactions:

1) the total value of which does not constitute a revenue or tax deductible cost on a permanent basis,

excluding financial transactions, capital transactions and transactions concerning investments, fixed assets or intangible assets,

2) in which the price was determined in an open tender procedure on the basis of the Act

of 29 January 2004. – Public procurement law (Journal of Laws of 2017, items 1579 and 2018, and of 2018, items 1560, 1603, 1669, 1693),

3) consisting in attributing income to a foreign establishment located on the territory of the Republic of Poland by non-residents, if the provisions of relevant international agreements to which the Republic of Poland is a party provide that this income may be taxed only in a state other than the Republic of Poland.

In addition, the Act provides the introduction of a new wording of the regulation concerning the documentation obligation for entities in which the State Treasury holds shares. The Act indicates that the obligation to prepare local documentation, that the obligation to produce local transfer pricing documentation does not apply to controlled transactions where the links between entities result exclusively from connections with the State Treasury or local government units and their unions.

It should be noted that entities with personal or capital ties other than those resulting from connections with the State Treasury will be obliged to prepare transfer pricing documentation.

Author: Piotr Rzepka ? Tax consultant