Poland: New corporate income tax regulations (CIT-TP) and personal income tax (PIT-TP) regulations

​published on 8 November 2017

Two regulations of the Minister of Development and Finance on template simplified corporate income tax form – CIT-TP (of 8 June 2017, Journal of Laws Item 1190) and on template simplified personal income tax form – PIT-TP (of 8 June 2017, Journal of Laws Item 1205) entered into force at the end of June.

• who must draw up transfer pricing documentation,
• who, directly or indirectly, make payments to entities from the so-called tax havens;
• whose revenues or expenses (in the meaning of the Accounting Act) exceed the equivalent of EUR 10 million in a tax year.

The amount in EUR needs to be converted into PLN at the average exchange rate announced by the National Bank of Poland as of the last working day of the tax year preceding the tax year for which the report is filed.

Pursuant to Article 10 of the act amending the Personal Income Tax Act, the Corporate Income Tax Act and some other acts (of 9 October 2015, Journal of Laws 2015, Item 1932), the obligation to file the above forms for the first time will apply to the tax year commencing after 31 December 2016. The forms completed by the obliged taxable persons will have to be attached to the annual tax return (CIT-8 or PIT-36 as the case may be).

As the questions included in the report are about strategic matters, the report should be filled out in liaison with the decision-making entities and persons in the group, as well as with the accounting departments and your advisers on transfer pricing. Information provided in the report should also be consistent with the data and information included in the transfer pricing documentation.

• type(s) of relationships (e.g. capital, management, family links),
• permanent establishment(s),
• the number of associated enterprises with which the taxable person made transactions or other dealings,
• core business and functional profile of the taxable person,
• restructuring processes (e.g. a change of structure or legal form, merger, demerger, takeover/acquisition, including takeover of an organised part of the enterprise), changes in the functional analysis (i.e. in functions, assets, risks in transactions with associated enterprises) and about compensation received/paid in this regard,
• the type(s) of transactions or other dealings made with associated enterprises (or for which the due amounts are paid directly or indirectly to entities from the so-called tax havens), their (net) values, percentage share in the taxable person's comprehensive income, and the country (countries) of the registered offices of the transacting parties,
• cost contribution agreements leading to the production of intangible assets along with their values (and the determination of the taxpayer's contribution/revenue triggered by it),
• transactions (e.g. on services, goods or intangible assets) effected free of charge.

By introducing the obligatory CIT-TP and PIT-TP forms the tax authorities want to identify and asses the risk of understating the taxable person's income earned from the transactions or other dealings with associated enterprises.

The introduction of the new reporting obligation will add administrative burden and introduce the need to ensure efficient exchange of information within the entire group. CIT-TP and PIT-TP forms will provide a comprehensive picture of the taxable persons in terms of transfer pricing and will become an important tool which the tax authorities will use to search and select entities to be investigated.

The full wordings of the two regulations in polish are available online at:
CIT-TP Regulation: http://dziennikustaw.gov.pl/du/2017/1190/1
PIT-TP Regulation: http://dziennikustaw.gov.pl/du/2017/1205/1