On 23 June this year, the Act of 19 June 2020 on interest rate subsidies on bank loans granted to entrepreneurs affected by COVID-19 and on simplified procedure for approval of the agreement in connection with COVID-19’s application, the so-called Shield 4.0, was published.
As part of the facilitations for entrepreneurs, the deadlines related to the transfer pricing and TPR documentation were extended.
In accordance with Article 77 point. 62 of the said Act, the deadlines were extended:
- for submitting information on transfer prices (TPR), and
- to make a statement on the preparation of local transfer pricing documentation
- by 31 December 2020. – where that period ends between 31 March 2020 and 30 September 2020,
- by 3 months, where that period ends between 1 October 2020 and 31 January 2021.
- for grouped transfer pricing documentation to be attached to local documentation
- until the end of the third month following the day on which the extended time limit for the submission of the statement that the local transfer pricing documentation has been prepared has expired.
We would like to remind you that under the regulations in force so far, taxpayers were obliged to submit TPR information and a statement on preparation of local transfer pricing documentation by the end of the ninth month after the end of the financial year, thus taxpayers gained an additional 3 months to comply with these obligations.
Nevertheless, the situation when the selected controlled transaction is not marketable still remains outside the regulations, the risk refers to the marketability clause of the transaction to which Article 11 m of the uCIT requires in the form of a management statement.
According to the said article (art. 23y of uPIT respectively), affiliated entities which are obliged to prepare local transfer pricing documentation shall submit to the tax offices a statement on its preparation, by the end of the ninth month after the end of the financial year. In the declaration on the preparation of local transfer pricing documentation, the affiliate declares that:
- it has prepared the local transfer pricing documentation;
- the transfer prices of controlled transactions covered by the local transfer pricing documentation are determined on terms and conditions which would be agreed between unrelated parties.
According to art. 11m sec. 3 of uCIT and accordingly in art. 23y sec. 3 of uPIT the statement on preparation of local transfer pricing documentation is signed by the head of the unit within the meaning of the Accounting Act, stating his function. According to the Accounting Act, the term “unit manager” is understood as a member of the management board or other managing body, and if the body is multi-person, the unit manager is the members of that body, excluding the proxy established by the unit. In the case of a general partnership and a civil partnership, the manager of the unit is understood as partners leading the affairs of the partnership, in the case of a partnership – partners leading the affairs of the partnership or the board, and in the case of a limited partnership and a limited joint-stock partnership – general partners leading the affairs of the partnership. In the case of a natural person conducting business activity, that person shall be regarded as the unit manager.
Author: Beata Rawa – Transfer Pricing Manager