Transfer pricing risk management

In this category, we focus on transfer pricing risk management, a key element of companies’ tax strategy in the international market.

We begin with “safe harbors”, discussing simplifications for low-value-added services transactions and loans, in accordance with the revised regulations and OECD standards. We then turn to APA pricing agreements, which establish transfer pricing criteria for controlled transactions prior to implementation. We pay special attention to the selection of the most appropriate transfer pricing verification method, recommended by Polish law and the OECD, taking into account the conditions between related parties. We also discuss the comparable uncontrolled price method (MPCN), which compares prices in transactions between related parties and independent parties, and the resale price method (MCO), which calculates the market price by reducing the price of a transaction with an independent party by the margin of the resale price.

We go on to describe the cost-plus method, which determines the selling price based on the sum of the cost base and the profit mark-up, and the net transaction margin method, which analyzes the net profit margin in transactions with related parties. It concludes with a discussion of the profit sharing method (MPZ), which determines and divides total profits among related parties, based on a common accounting standard. Each of these topics is covered in detail, providing key information and practical guidance.

Safe harbour

Safe harbor Along with the amendment to the transfer pricing regulations, simplifications (i.e. safe harbor ) were introduced, covering transactions related to low-value-added services, as well as loans. The appendices to the CIT Act and the PIT Act include an exemplary catalog of benefits that may constitute low-value-added services. This catalog was created on the basis of the achievements of the OECD and the […]

APA

APA pricing agreement Advance pricing arrangements (APAs) 1 specify, prior to making controlled transactions, an appropriate set of criteria (including the method, objects of comparisons and appropriate adjustments thereto, and assumptions as to future events) necessary to make a transfer pricing for these transactions at a predetermined level. period. Pricing agreements typically cover several transactions, several types of recurring transactions, or the entirety […]

Transfer pricing verification methods

In accordance with the provisions of Polish law and OECD guidelines, the choice of the transfer valuation method should lead to finding the most appropriate method for a specific, verified case. Pursuant to Art. 11d section 3 of the Corporate Income Tax Act, when selecting the most appropriate method in the given circumstances, account shall be taken in particular of: – […]