On 2 June 2021 The Director of the National Fiscal Information issued an individual interpretation (ref. 0113-KDIPT2-3.4011.207.2021.3.MS) on whether, in the case of a transaction with a civil partnership, the value of the transaction is determined:
- in relation to the civil partnership,
- or separately for each partner of the civil partnership.
In the described factsheet, the Applicant is conducting business activity, inter alia, in the field of road transport of goods in Poland and the European Union, in the framework of which she provides transport services for a civil partnership (two partners), in which one of the partners is the son of the Applicant, and the other partner is a complete stranger to the Applicant, without any connections. The value of transport services provided by the Applicant exceeds 2 000 000,00 PLN net.
A diagram of the interrelationships is presented below.
Diagram: Interdependencies between actors
The Applicant, among others, questioned how to determine the threshold amount of a homogeneous transaction. In the Applicant’s opinion, the threshold amount of homogeneous controlled transactions is determined in relation to each partner (according to shares in the company), as it is the partner of a partnership that is a taxpayer of personal income tax, not the company.
The homogeneous nature of a transaction should be understood as the similarity of the subject matter of the transaction and other main parameters of the transaction relevant from the point of view of transfer pricing (such as e.g. significant functions, assets, risks, as well as the manner of price calculation, significant terms of payment, etc.). If they are similar within several flows, the individual flows should be aggregated as one transaction of a homogeneous nature.
According to the Applicant, the threshold amount of controlled homogeneous transactions is determined in relation to each partner, because it is the partner of a civil partnership that is a taxpayer of personal income tax, and not the partnership, as well as the documentation should only be done in relation to the partner who is the son of the Applicant, because he is the only one with a family connection to her.
In the opinion of the tax authority, the threshold amount of controlled homogenous transactions referred to in Article 23w(2)(3) of the Personal Income Tax Act should be referred to the entities that are participants in the transaction. Therefore, in the case of a transaction with a civil law partnership, the Applicant should determine this amount in relation to the civil law partnership (the other party to the transaction), and not separately for each partner of the partnership. The fact that one of the partners is not an entity with family connections to the Applicant is not relevant in this case.
Author: Beata Rawa – Transfer Pricing Manager