Transfer pricing audits
In this category we describe in detail the administrative and fiscal procedure for transfer pricing audits. The discussion focuses on the methods the fiscal authorities use to verify that the prices set in transactions between related parties are at arm's length. The process of examining transfer prices, as defined in tax law, has a formalised structure and consists of several stages. It is important that taxpayers carrying out transactions with related parties are aware of the rules and principles that must be observed.
The category also discusses the sanctions for failing to prepare transfer pricing documentation. The changes to the transfer pricing rules introduced in 2019 brought new fiscal penal sanctions for breaches of documentation obligations. Those changes, including new articles of the Fiscal Penal Code, have a direct effect on taxpayers, which is key in the context of legal liability.
We also discuss the criminal sanctions arising from transfer pricing breaches. Under the Act on the liability of collective entities, a collective entity may be held liable if a natural person acting on its behalf breaches the transfer pricing rules. This underlines how important it is to understand and observe the regulations in this field.
This category provides comprehensive information on the procedures, sanctions and legal liability connected with transfer pricing audits.
Audit activities rarely stop at a single tax. The authorities have data from standard audit files, the STIR system and TPR returns, so the verification of transfer prices is often the starting point for questions about VAT, withholding tax or debt financing costs. We prepare documentation in the context of the taxpayer's entire settlement and, once an audit has been opened, the DMS TAX team handles the case across every area the proceedings touch. The course of the audit activities themselves is described on kontrolepodatkowe.org, and we provide tax advisory services in their full scope under the brand DMS TAX.