Transfer pricing
We help companies manage risks related to transfer pricing and meet documentation obligations. Our transfer pricing advisory provides support at every stage of executing intra-group transactions, minimizing tax risks and potential issues during audits.
What is transfer pricing?
Transfer pricing refers to the prices used in transactions between related entities, such as those linked by capital, personnel, or family ties. These prices must reflect the conditions that would be established by independent entities operating in a similar market. Transfer pricing regulations aim to prevent the artificial shifting of profits between entities. Our services help mitigate the tax risks associated with transactions between related parties.
Who is transfer pricing for?
Our transfer pricing services are intended for businesses that:
- Conduct transactions with related entities, both domestically and internationally, and must comply with transfer pricing regulations.
- Are required to prepare documentation according to current tax laws.
- Want to minimize risks associated with tax audits and optimize internal processes related to intra-group settlements.
- Undertake large investments or reorganizations that involve significant tax risks.
Our range of support
Transaction analysis and risk identification
We analyze transactions between related entities to determine their qualification under transfer pricing regulations and identify potential risks.
Preparation of transfer pricing documentation
We prepare comprehensive transfer pricing documentation in compliance with applicable regulations to ensure compliance with tax law.
Comparative analysis (benchmarking)
We conduct benchmarking analysis to determine whether the conditions applied in intra-group transactions adhere to the arm’s length principle. Using reliable databases, we can accurately compare market prices and margins, allowing for a sound assessment of transactions.
Implementation of transfer pricing policies
We assist in developing and implementing transfer pricing policies tailored to the specifics of your business and in compliance with legal regulations.
Preparation of an advance pricing agreement (APA) application
We help prepare and submit APA applications, which provide certainty regarding applied transfer pricing and minimize tax risks. Obtaining an APA can offer tax stability for several years.
Support during tax audits
We represent clients during tax audits concerning transfer pricing, safeguarding their interests and minimizing the risk of additional liabilities. We prepare legal arguments, provide expert presence, and support communication with tax authorities.
Transfer pricing training
We offer dedicated training for finance and management teams to help them understand transfer pricing rules and implement proper procedures within the company.
Cooperation process for transfer pricing
- Transaction analysis – We review all intra-group transactions to identify those requiring transfer pricing documentation.
- Preparation of documentation – We create full documentation that meets all formal legal requirements, helping your company avoid issues during audits.
- Policy implementation – We assist in implementing appropriate transfer pricing policies, ensuring compliance and optimal management of settlements.
- Audit support – We provide support during tax audits to minimize the risk of negative consequences.
- Team training – We conduct training for key team members to ensure operational compliance and efficiency in managing transfer pricing.
Transfer pricing review
Transfer pricing questionnaire
Complete the questionnaire, and our expert will check your transfer pricing obligations and identify any areas of risk during a transfer pricing audit.
Free documentation obligations analysis
We offer a free analysis of documentation obligations, ideal for all companies conducting transactions with related entities.
Benefits for your company
- Risk reduction: Proper transfer pricing documentation minimizes the risk of additional tax liabilities and penalties due to non-compliant intra-group transactions.
- Compliance with regulations: We ensure that all transactions comply with current regulations, reducing the risk of tax audits and penalties.
- Transparency: Our advisory services increase the transparency of intra-group transactions, which is important for both tax authorities and business partners.
- Strategic planning: Through transfer pricing analysis, we help clients optimize their transaction structures in a way that complies with regulations and supports long-term business growth.
Why choose us?
Awarded for our contribution to economic development, commitment to corporate social responsibility, and creation of a strong and recognizable brand.
Recognized for upholding high standards in business operations, guaranteeing top-quality service in 2024.
Awarded for actions based on the principles of corporate social responsibility, with effective policies for employees and clients, as well as numerous social projects.
Ranked in the 2024 Rzeczpospolita tax advisory firm ranking.
Trusted Us
Costs of our support
We support both large enterprises and smaller businesses aiming to grow and gain a competitive edge. If you’re wondering how much you can save and what benefits our collaboration can bring, contact us.
A conversation comes with no obligation and could open the door to significant tax savings.
Have a questions? Let’s talk!
Our team responds quickly. Try us!
- kancelaria@staniekandpartners.com
- +48 534 535 508
- NIP: 8992913267
- REGON: 520686986
What documentation is required?
To meet transfer pricing requirements, large taxpayers need to prepare Local Documentation (Local File) and Group Documentation (Master File), and conduct benchmarking analyses. It is also necessary to complete the TPR-C/P forms and submit declarations confirming the preparation of the required documentation.
Maintaining transfer pricing documentation
Transfer pricing documentation must include a detailed description of transactions, a function and risk analysis, and the valuation methods used. Incorrect pricing can lead to financial penalties, including additional tax liabilities. To avoid issues, companies should regularly update their documentation, taking into account changes in tax laws and their evolving structure.
Importance of benchmarking analysis
Benchmarking analysis is an essential part of the transfer pricing process. It allows for comparing transaction conditions with market realities and is necessary to demonstrate that costs are set in line with industry standards. These procedures are required by tax authorities, making proper benchmarking crucial. This analysis minimizes tax risks and ensures compliance with withholding tax regulations.
Consequences of incorrect pricing
Proper management of transfer pricing and withholding tax is both an obligation and a strategy for minimizing tax risk. Regular reviews of documentation and benchmarking analyses are key to maintaining compliance and avoiding penalties such as withholding tax. Knowledge of current tax requirements and well-prepared documentation is critical to a company’s financial security.
Incorrect transfer pricing can lead to serious financial consequences, including additional tax liabilities, interest on overdue payments, and penalties. Tax authorities can make adjustments and impose withholding tax if they prove that transactions were not conducted under market conditions. These services are part of the offerings from Staniek & Partners, with offices in Gdynia, Kraków, Wrocław, and Warsaw.
FAQ czyli najczęściej zadawane pytania
What is transfer pricing documentation?
Transfer pricing documentation is a comprehensive set of information and analyses regarding the prices and conditions of transactions between related entities, required by legal regulations. Its purpose is to prove that transactions between related parties (or with a tax haven entity) are conducted on market terms, i.e., the same terms that would be agreed upon between unrelated parties under similar circumstances.
When is transfer pricing documentation required?
Documentation is required depending on the type and value of the transaction if it exceeds specific documentation thresholds:
- Goods transactions: PLN 10,000,000
- Financial transactions: PLN 10,000,000
- Service transactions: PLN 2,000,000
- Other transactions: PLN 2,000,000
For controlled transactions with entities based in countries practicing harmful tax competition (tax havens), the documentation thresholds are:
- Financial transactions: PLN 2,500,000
- Non-financial transactions: PLN 500,000
What are transfer prices?
A transfer price is the price or value derived from a transaction between related entities, which must comply with the arm’s length principle. This principle requires that related entities set prices under the same conditions as independent parties would in comparable circumstances. Transfer pricing services aim to prevent tax risks associated with the potential misuse of transfer pricing to avoid taxation or optimize tax positions within capital groups.
What are related entities?
A related entity (also referred to as a related party) in the context of transfer pricing refers to two or more entities that are economically or otherwise connected. Such connections may stem from actual or potential controlling or dependent relationships, shared control, or joint dependency. Related entities can influence each other’s actions or decisions, which may affect the pricing of transactions between them.
What is a benchmarking analysis?
A transfer pricing analysis, also known as a benchmarking analysis, verifies and confirms that the conditions of controlled transactions comply with market standards. Its goal is to demonstrate that transactions between related parties reflect market conditions. This helps ensure that the prices set in such transactions are objective and do not favor any party, helping avoid disputes with tax authorities and fulfilling transfer pricing obligations.
What are tax haven transactions?
Tax haven transactions, subject to transfer pricing regulations under CIT and PIT laws, involve both related and unrelated entities that are domiciled or headquartered in a country practicing harmful tax competition.
The list of countries/territories recognized as “tax havens” is published by the Ministry of Finance.
What are the methods for setting transfer prices?
Several methods can be used to set transfer prices for transactions between related entities. The choice of method depends on the type of transaction and the availability of market data. Commonly used methods include:
- Comparable Uncontrolled Price Method (CUP): This method compares the price of a controlled transaction with prices from similar transactions between unrelated entities. CUP is the preferred method when suitable comparable transactions are available.
- Cost Plus Method (CPM): This method establishes the transfer price in a controlled transaction as the sum of the cost base and a markup on the costs included in the base.
- Resale Price Method (RPM): RPM analyzes the margin that a controlled entity achieves in transactions with unrelated buyers and applies this margin to the costs of the controlled transaction to determine the resale price.
- Profit Split Method (PSM): This method involves determining the total profit generated by related entities from a controlled transaction and splitting that profit in the same proportion as unrelated entities would, considering the functions performed, assets involved, and risks borne.
- Transactional Net Margin Method (TNMM): TNMM determines a financial ratio that reflects the profit margin a related entity earns in a controlled transaction, compared to a relevant base. The profit margin is calculated by subtracting costs from the revenue of the controlled transaction.
What are the penalties for non-compliance with transfer pricing regulations?
Under the Polish Penal Fiscal Code (KKS), failure to comply with transfer pricing obligations can result in fines. Penalties include failure to prepare documentation, failure to include group documentation, or preparing incorrect documentation, with fines up to 720 daily rates (up to approximately PLN 41.28 million in 2024). Additionally, late submission or improper filing of TPR forms can result in fines of up to 240 daily rates (up to approximately PLN 13.76 million in 2024).