Checking activities

The checking activities are undertaken by the tax authority ex officio. In this regard, the tax authority may undertake checking activities aimed at:

  1. checking timeliness:
    • submitting declarations,
    • payment of declared taxes, including those collected by payers and collectors,
  2. confirmation of the formal correctness of the documents listed in items 1,
  3. determination of the facts to the extent necessary to confirm compliance with the presented documents.

It should be borne in mind that the transfer pricing tax documentation is informative, and therefore it is a description of the facts concerning the execution of transactions between related parties. In our opinion, point 3 above authorizes the tax authority to apply to the taxpayer pursuant to Art. 9a paragraph. 4 uCIT (respectively regulations in uPIT) to submit a DPCT within 7 days. The tax authority may also ask the taxpayer to provide all evidence confirming the entries made in the DPCT. In particular, the tax authority may require certified and translated copies of foreign-language documents, and documented DPCT related to the transaction.

It should be noted that checking activities are often of the so-called cross-checking, i.e. verification of accounting entries due to the control of another taxpayer. Such investigations may, in certain circumstances, result in a request to submit a DPCT.