On 29 November 2019 an appeal No. 136 was filed concerning the obligation to prepare CIT-TP by taxpayers who, with respect to transactions carried out in 2018, took advantage of new regulations and thus did not exceed new documentation thresholds or took advantage of introduced exemptions.

In accordance with the position of the Minister of Finance, the provisions of Article 44 Section 2 of the Act of 23 October 2018 amending the Personal Income Tax Act, the Corporate Income Tax Act, the Tax Ordinance Act and certain other acts (Journal of Laws of 2018, item 2193) do not include Article 27 Section 5 of the Corporate Income Tax Act of 15 February 1992 (in the wording binding in 2018). Therefore, it is not relevant for determining the obligation to submit a CIT-TP report that the taxpayer chose new documentation provisions. Thus, it is also unrelated to the determination of the obligation to submit a CIT-TP report if the new regulations apply.

The above means that the taxpayer was obliged to submit a simplified CIT-TP report for 2018 regardless of the choice of applying the transfer pricing documentation regulations (if such an obligation arose for the taxpayer under the regulations in force in 2018).

Thus, for example, entities which in the tax year exceeded revenues of EUR 10 million and which at the same time, in accordance with the legal status in force since 1 January 2019, took advantage of the exemption from the obligation to prepare transfer pricing documentation by conducting only transactions with entities with their registered offices in the territory of the Republic of Poland (after meeting the conditions set forth in Article 11n of the Corporate Income Tax Act), and thus did not prepare transfer pricing documentation for 2018, were obliged to submit a CIT-TP report for 2018.

Author: Beata Rawa – Transfer Pricing Manager