In today’s global economy, related-party transactions attract increasing scrutiny from tax authorities-and Poland is no exception.
If your company operates in Poland or transacts with Polish entities, understanding local transfer pricing (TP) regulations is not optional. It’s essential for compliance and risk management.
When Do Transfer Pricing Rules Apply?
Under the Polish Corporate Income Tax (CIT) Act, the tax authorities have the power to reassess the income from transactions, especially between related entities, if they determine that the pricing does not reflect the arm’s length principle.
This means transactions must be priced as if they were carried out between unrelated parties in an open market.
Broad Definition of “Related Parties”
The Polish definition of related entities extends beyond traditional ownership thresholds. It includes among others:
- Any person or entity that can influence another’s key economic decisions, even without formal ownership.
- Apparent disruptions in ownership chains or artificial structures, even if informally constructed.
This wide scope means that many business relationships may qualify as related, even when control is indirect or informal.
Documentation Thresholds for 2025
Transfer pricing documentation is required when:
- Transactions with a related party exceed:
- PLN 10,000,000 for commodity or financial transactions,
- PLN 2,000,000 for services or other types of transactions.
- Transactions involve tax haven entities and exceed:
- PLN 2,500,000 for financial transactions,
- PLN 500,000 for non-financial transactions.
Each of these thresholds is assessed on the total value of the same type of transaction within a tax year.
Limited Exemptions: When Documentation Is Not Required
Some domestic transactions between Polish taxpayers may be exempt from the local transfer pricing documentation requirement.
However, several conditions must be met-most notably, neither party can report a tax loss. Even when exempt, usually the taxpayer must still report these transactions through the TPR form.
Benchmarking Studies and Safe Harbour Provisions
A benchmarking study is a standard component of the local TP file. It demonstrates that the prices used in intra-group transactions are consistent with market conditions. Polish law also allows the use of safe harbours for:
- Intra-group loans, by applying interest rates officially announced and accepted by the Polish tax authorities;
- Low value-added services, using fixed markups and simplified compliance procedures.
These simplified methods are only available if strict CIT Act conditions are satisfied.
TPR Reporting and Compliance Obligations
The TPR form is a separate compliance obligation. It includes:
- A written statement confirming that transfer pricing documentation has been prepared and that prices meet market conditions,
- Transactional details about both controlled and uncontrolled transactions,
- Information about business restructurings, intangible asset transfers, and joint ventures,
- Partner contributions in partnerships and relevant contractual arrangements.
As of 2025, only members of the management board are authorized to sign the TPR form, apart from the specifically listed proxies (such as tax advisors). The filing deadline is the end of the 11th month following the tax year.
Master File Requirements for Multinational Groups
If a taxpayer belongs to a multinational group with consolidated revenues exceeding PLN 200 million, it must also prepare a Master File. This document provides a high-level overview of the group’s global transfer pricing policies. Unlike other reports, the Master File may be prepared in English, however the Polish tax authorities may ask for a translation. The deadline is 12 months after the tax year-end.
Adjustments and Penalties: What Happens if You Get It Wrong
In the event of an audit, if the tax authorities find that the taxpayer’s declared income does not reflect arm’s length pricing, it may impose transfer pricing adjustments. These adjustments are subject to:
- The standard 19% CIT rate, plus
- A 10% additional tax on the reassessed income.
This additional rate may increase to:
- 20%, if the taxpayer fails to submit TP documentation and the reassessed base exceeds PLN 15 million,
- 30%, if both conditions are met.
These sanctions are not theoretical – they are actively applied in practice.
Why Getting Transfer Pricing Right Is Non-Negotiable
The Polish transfer pricing regime is sophisticated and heavily regulated. With mandatory documentation, detailed reporting, and aggressive penalty provisions, businesses must stay ahead of their compliance obligations. Accurate records, market-based pricing, and on-time filings are essential to avoid disputes and financial exposure.
When in doubt, consult with an experienced tax advisor to ensure that your transfer pricing strategy meets Polish standards.
