Comparability analyses, market analyses, valuations

We help clients determine the market value of planned transactions between related parties, estimate historical values and assess whether the transfer pricing settlement models applied are justified, as well as design and implement settlement systems for groups of related parties.

Our main task is to prepare a sound analysis of historical and planned data under given transaction conditions, in such a way that the objectives set for the company by its management board can be met and legal and tax risks reasonably minimised.

Range of services

Within transfer pricing analyses and valuations we provide the following services:

Comparability analyses of a transaction carried out between related parties, covering a comparison of financial data, including commercial data, either internally, on the basis of the client's own data on identical or similar transactions, or externally, on the basis of market data on comparable transactions, according to objective comparability criteria.

The purpose of a transaction comparability analysis is to substantiate the arm's length character of transactions with related parties on the basis of the results the client achieves in comparable internal transactions or, in an external comparison, the results achieved by independent entities.

Profitability analyses, which consist in examining the level of profitability of the client's business activity against comparable entities on the Polish market in a given financial year or over a number of years, using aggregated data and objective comparison criteria.

The purpose of a profitability analysis is to substantiate the arm's length character of transactions with related parties on the basis of the results achieved by comparable entities on the Polish market in a given period. The analysis examines overall profitability at the level of return on sales and of operating activity. In certain justified cases other financial ratios are examined as well, including gross and net margin or result, ROA and ROE.

Valuations of individual tangible and intangible assets, of organised parts of an enterprise, of an entire enterprise or of shares and stock.

A detailed description of the methodology can be found on the page profitability and transaction comparability analyses.

Frequently asked questions

Is a benchmarking study a mandatory part of the documentation?

Yes. Since 2019 local transfer pricing documentation has included a benchmarking study or, where preparing one is not possible or appropriate, a compliance analysis. Exempt from the obligation to prepare an analysis are, among others, transactions covered by a safe harbour simplification and transactions carried out by micro and small enterprises.

How does a benchmarking study differ from a compliance analysis?

A benchmarking study is based on data on the prices, margins or results of independent entities and leads to an arm's length range. A compliance analysis is used where reliable comparable data are not available, and it demonstrates that the conditions of the transaction correspond to those independent entities would have agreed.

Where does the data for the analysis come from?

The starting point is the taxpayer's own data on transactions with independent entities, that is an internal comparison. Where no such transactions exist, external data on market entities or transactions is used, taken from financial statement databases, and the sample is then narrowed down according to comparability criteria.

Why is the result presented as a range rather than a single figure?

Market conditions do not produce a single price but a range of results achieved by independent entities. In practice the range is most often set as the interquartile range, which limits the influence of extreme observations. A result falling within that range does not require an adjustment.

How often should the analysis be updated?

At least once every three years, provided the economic environment has not changed to an extent that materially affects the outcome. A change in the business model, in the scope of functions or in market conditions calls for an earlier update.