Pursuant to Article 82(1)(2) of the Tax Ordinance, all entities conducting business activity are obliged to draw up and submit information on agreements concluded with non-residents within the meaning of foreign exchange law (ORD-U).
As a rule, the information of the ORD-U should be drawn up and sent within three months from the end of the tax year. Due to the COVID-19 pandemic, the deadline in question was extended by 2 months in 2019 and expires on 31 May 2020.
Until now, entities obliged to submit CIT-TP declarations were exempt from the obligation to submit information to ORD-U. Under the amended regulations, entities that submit information TPR-C remain obliged to submit information ORD-U.
The ORD-U information should be prepared:
- one of the parties to this agreement, directly or indirectly, participates in the management or control of the other party to the agreement or holds a share in its capital entitling to at least 5% of all voting rights, or
- another entity, not being a party to the agreement, at the same time participates, directly or indirectly, in the management or control of the entities which are parties to the agreement or holds shares in the capital of such entities entitling, in each of them, to at least 5% of all voting rights, or
- a non-resident, being a party to the agreement, has an enterprise, branch or representative office in the territory of the Republic of Poland within the meaning of separate regulations
– and if the entity obliged to prepare and provide information knew or could have known, with due diligence, about the fact of holding such shares or about the fact of having an enterprise, branch or representative office in the territory of the Republic of Poland by a non-resident.
By means of the ORD-U information, all agreements concluded with a given counterparty should be shown in the scope of which the sum of receivables or the sum of liabilities resulting from the agreements will exceed the thresholds specified below in the tax year:
- EUR 300 thousand – in case of transactions with a related party,
- EUR 5,000 – in the case of transactions with a non-resident having a company, branch or representative office in Poland, also when the latter is an entity unrelated to the taxpayer).
When analysing the obligation to submit information to the DSB, one should take into account, apart from written agreements, also receivables or liabilities resulting from invoices and bills issued or received (when agreements are not concluded). Specific values of liabilities or receivables, expressed in a foreign currency, should be converted into the Polish currency at the average exchange rate announced by the National Bank of Poland as at 31 December of the year preceding the tax year.
Author: Beata Rawa – Transfer Pricing Manager