Step by step transfer pricing

In this category, we describe in detail the aspects of transfer pricing that are crucial in transactions between entities related by equity, family or partnership. Transfer pricing has an important role in international business relations, and its understanding and proper application is essential for the proper functioning of companies operating in different markets.

We begin by explaining the arm’s length principle, which is the international standard used to determine transfer prices for tax purposes. Then we move on to analyze the concept of controlled transaction, which appeared in the Polish legal order in 2019. In this context, we consider how transfer pricing is considered in a specific transaction and what are the key aspects in its identification and verification. We also focus on transfer pricing obligations, particularly in the context of related party transactions. We explain how important it is to correctly identify relationships between entities to ensure compliance with applicable regulations and avoid tax risks. We also touch on the subject of entities from so-called tax havens, which are defined in Polish law as countries using harmful tax competition.

Finally, we provide a comprehensive glossary of terms related to transfer pricing to facilitate understanding of this complex matter.

Related entities

The obligations related to transfer pricing relate primarily to transactions carried out by related entities. For this reason, it is important to correctly define what types of entities fall under this concept. This is because the determination of connections can be treated as the first element of verifying the existence of the transfer pricing documentation obligation. Identification of connections may be difficult, especially […]

Entities from the so-called tax havens

Entities from the so-called tax havens In Polish law, “tax haven” is referred to as “a country applying harmful tax competition”. This harmfulness results from the fact that these countries and territories do not impose property, income and capital taxes on their inhabitants and investors or limit them to a small amount. Consequently, these countries are more attractive to investors who invest their […]