Transfer pricing risk management
In this category we focus on transfer pricing risk management, a key element of the tax strategy of companies operating on international markets.
We begin with safe harbours, discussing the simplifications for low value adding services and for loans, in line with the amended regulations and OECD standards. We then move on to advance pricing agreements (APAs), which establish the criteria for pricing a controlled transaction before it is carried out. We pay particular attention to choosing the most appropriate transfer pricing method, as recommended by Polish law and the OECD, taking into account the conditions between related parties. We also discuss the comparable uncontrolled price method (CUP), which compares prices in transactions between related and independent parties, and the resale price method (RPM), which arrives at the arm's length price by reducing the price of a transaction with an independent party by a resale margin.
We then describe the cost plus method, which sets the sale price on the basis of a cost base plus a profit mark-up, and the transactional net margin method, which examines the net profit margin in transactions with related parties. We close with the profit split method (PSM), which determines and divides combined profits between related parties on the basis of a common accounting standard. Each of these topics is discussed in detail, providing key information and practical guidance.