In the individual interpretation of 10 June 2020 The Director of the National Revenue Office* explained that if a shareholder joins a commercial company in the form of a voluntary redemption of shares, regardless of its nature (voluntary or compulsory), there will be an obligation to prepare transfer pricing documentation – if the documentation thresholds referred to in Art. 11k par. 2 of the Income Tax Act are exceeded.
In the interpretation in question, the Director of the National Revenue Office referred to the rulings of administrative courts, which consider all types of legal transactions resulting in the transfer of ownership of assets which affect the taxpayer’s income (loss) within the meaning of the Income Tax Act (NSA of 8 March 2016 as a transaction within the meaning of the Corporate Income Tax Act. file no. II FSK 4000/13, of 30 September 2015 file no. II FSK 3137/14, of 17 December 2014 file no. II FSK 2849/12, of 15 January 2013 file no. II FSK 1052/11).
As a result, the tax authority indicated that “the redemption of shares, regardless of its nature (voluntary or compulsory), will fall within the notion of “transaction” and should be the subject of tax documentation if the condition concerning exceeding the annual value of concluded transactions, referred to in Art. 11k par. 2 of the Income Tax Act, is fulfilled”.
* Individual interpretation of the Director of National Revenue Office Information of 10.06.2020, no. 0111-KDIB2-1.4010.110.2020.1.AR
Author: Michał Mika – Senior tax consultant