Transfer pricing step by step
In this category we describe in detail the aspects of transfer pricing that are key in transactions between parties related by capital, by family or by personal ties. Transfer prices play an important role in international business relations, and understanding and applying them correctly is fundamental to the proper functioning of businesses operating on different markets.
We begin by explaining the arm's length principle, the international standard used to set transfer prices for tax purposes. We then move on to the concept of a controlled transaction, which entered Polish law in 2019. In that context we consider how transfer prices are looked at in a specific transaction and what the key aspects of identifying and verifying them are. We also focus on the obligations connected with transfer pricing, in particular for transactions carried out by related parties. We explain how important it is to establish the relationships between entities correctly in order to ensure compliance with the regulations in force and to avoid tax risk. We also address entities from so-called tax havens, which Polish law describes as countries applying harmful tax competition.
Finally, we offer an extensive glossary of transfer pricing terms to make this complex subject easier to follow.