In accordance with the amendment to the regulations in force since 1 January 2019, the documentation obligation is subject to controlled transactions of homogeneous nature whose value exceeds certain documentation thresholds.

Controlled transaction means identified on the basis of the actual behavior of the parties of economic activities, including the assignment of income to a foreign plant, the conditions of which have been established or imposed as a result of connections. Thus, a rather broad definition of a controlled transaction has been introduced, including also events which in common language are not necessarily considered as transactions, which leads to numerous doubts of interpretation.

One such doubt was whether the payment of dividends is subject to a documentation requirement.

The dividend is the net profit earned by the company paid to shareholders or persons holding shares in the company. The dividend is received proportionally by all shareholders or partners holding shares of the company on the day when the right to its payment was established.

On 22 August 2020. The Minister of Finance responded to the MP’s appeal No. 9368 indicating that the payment of dividend is not subject to the obligation to prepare transfer pricing documentation.

In the opinion of the Minister of Finance, the dividend payment itself cannot be directly perceived as an economic activity which, as a rule, should be identified with profit-making activity.

The dividend diploma, as rightly indicated, is related to the functioning of companies and is undertaken on the basis of the provisions of the Commercial Companies Code. Payment of dividend is not an independent economic activity, but a consequence of the company’s economic activity.

The issued response to the appeal will undoubtedly contribute to elimination of doubts appearing on the side of taxpayers as to the possible documentation obligation in this respect.


Autor: Beata Rawa- Transfer Pricing Manager