Poland: Transfer pricing inspections on the rise

Published on April 12, 2017

A greater number and higher effectiveness of transfer pricing inspections confirms the growing interest of Polish tax authorities in transactions among associated companies.
 
According to the inspection statistics kept by the Tax Inspection Office (TIO), there are currently 457 transfer pricing and tax avoidance proceedings pending against taxpayers. The number of transfer pricing inspections pending and completed in 2016 increased by 30 percent and 119 percent, respectively. In addition to the higher number of transfer pricing proceedings, the income assessed by the authorities on the Polish taxpayers is higher, too.
 

• reducing overstated losses in the amount of PLN 458.6 million (PLN 5.3 million in 2015),
• imposing a tax liability in the amount of PLN 166.1 million (PLN 5.4 million in 2015).

According to the deputy Head of the Tax Inspection Department of the Ministry of Finance, in the case of approx. 60% of transfer pricing inspections that revealed irregularities, the companies decided to amend their returns and not to appeal against the authority's decision.
 
Transfer pricing issues are more and more frequently triggering inspections by Polish authorities. Furthermore, they are getting increasingly more effective and the inspection consequences are becoming more severe for the taxpayers. The dedicated competence centres established in Poland, specialising in transfer pricing and having access to appropriate tools and specialised databases, undoubtedly add to that increased effectiveness.