Transfer pricing – manage group transactions in compliance with regulations

Transfer pricing is one of the most complex areas of tax law, especially for capital group companies. The rules on related-party settlements are strictly regulated and their improper application can lead to financial penalties and disputes with the tax authorities. EFEKTA Accounting Office offers comprehensive transfer pricing support, helping businesses to remain compliant and optimise intra-group transactions.

What is transfer pricing?

Transfer pricing is the pricing used in transactions between related parties, i.e., for example, companies within the same capital group. Their aim is to establish the value of the transaction in a manner comparable to market conditions. These transactions may include, but are not limited to:

• Deliveries of goods and services;
• Transfer of licences and copyrights;
• Financial settlements, such as loans or guarantees.

Compliance with transfer pricing regulations is particularly important to avoid being challenged by the tax authorities.

Why is transfer pricing important?

1. Documentation obligation
   Companies carrying out related party transactions must prepare transfer pricing documentation, especially if they exceed the thresholds set out in the legislation.
2. Risk of tax and financial penalties
   Incorrect transfer pricing or lack of documentation can lead to tax adjustments and penalties.
3. Regulatory complexity
   Poland’s transfer pricing law follows OECD guidelines, but also introduces local requirements that must be met.
4. Tax optimisation
   Proper transfer pricing can help to effectively manage the tax burden within a capital group.

Our transfer pricing services

At EFEKTA, we offer comprehensive support in transfer pricing management, tailored to your company’s specific needs. Our services include:

1. Preparation of transfer pricing documentation (TPR)
   We prepare local and master file in accordance with applicable regulations and OECD guidelines.
2. Benchmarking
   We conduct benchmarking that confirms that the prices used in intra-group transactions comply with the arm’s length principle.
3. Transfer pricing planning and optimisation
   We help you to establish a related-party settlement strategy that is both compliant and tax-advantaged at the same time.
4. Verification of contracts between related parties
   We analyse existing contracts for compliance with transfer pricing regulations.
5. Support in tax proceedings and audits
   We represent your company during transfer pricing audits, prepare explanations and defend your interests.
6. Training for the management
   We offer training for companies on transfer pricing obligations and their impact on company operations.

When is it worth using our services?

Our services are aimed at companies that:

• Carry out transactions with related parties within capital groups;
• Have transactions in excess of the limits that require the preparation of transfer pricing documentation;
• Want to make sure that the prices used are in line with the arms’ length principle;
• Are preparing for a tax audit or a dispute with the tax authorities;
• Are looking for support in optimising the group’s tax burden.

Benefits from cooperation with EFEKTA

1. Experience and expertise
   Our team is made up of specialists with many years of experience in transfer pricing service, who are familiar with the specifics of various industries.
2. Comprehensive approach
   We combine tax, financial and legal expertise to provide full support in managing intra-group transactions.
3. Minimising tax risks
   We ensure that your documentation complies with regulations, eliminating the risk of tax adjustments and penalties.
4. Individual solutions
   We tailor our services to the specifics of your business and the nature of the transaction.
5. Representation before the authorities
   We protect your interests during audits and tax proceedings, providing peace of mind and security.

Manage transfer pricing with confidence

With the services of EFEKTA, you will be assured that your intra-group transactions are compliant and your documentation meets all legal requirements. Benefit from our experience and let us take care of the safety and tax optimisation of your business.

Contact us today to find out more about our services. Make an appointment for a free consultation and see how we can help you manage transfer pricing.

EFEKTA – your partner in transfer pricing.

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What exactly is transfer pricing?

Transfer prices are the prices applied in transactions between related entities (e.g., companies within the same capital group). The fundamental principle is that the terms of these transactions (prices of goods, services, or loan interest rates) must reflect market conditions – meaning those that would be agreed upon by independent companies.

What is the arm’s length principle?

It is the cornerstone of transfer pricing regulations. It obliges related entities to establish transaction terms in such a way that they do not deviate from those that would be agreed upon by unrelated parties. Tax authorities verify whether profit has not been artificially shifted to another entity to avoid taxation.

When does the obligation to prepare transfer pricing documentation arise?

This obligation arises upon exceeding specific statutory thresholds (e.g., PLN 10 million for commodity and financial transactions, and PLN 2 million for service and other transactions). Documentation must be prepared for each homogeneous transaction that exceeds these limits in a given financial year.

What is the difference between a Local File and a Master File?

Local File: focuses on specific transactions carried out by a given entity; it contains price analyses and detailed transaction descriptions.

Master File: contains general information about the entire capital group, its structure, transfer pricing policy, and its intangible assets. The obligation to maintain it typically applies to larger capital groups.

What does a comparative analysis (benchmarking) involve?

It is the process of verifying the market nature of your prices. At EFEKTA, we analyze data from external databases to find comparable transactions or entities. The result of such an analysis (the benchmark) serves as crucial evidence for the tax office that the prices you apply are strictly at arm’s length.

What is the TPR report and who is required to file it?

TPR (Transfer Pricing Reporting) is an electronic transfer pricing information form that taxpayers obligated to prepare documentation must submit to the Head of the National Revenue Administration. It contains, among other things, data on related entities, transaction values, and pricing methods.

What are the consequences of lacking documentation or incorrectly determining prices?

The consequences can be severe: ranging from penal-fiscal sanctions for management personnel, through the imposition of an additional tax liability (income adjustment by the authority), all the way to punitive tax rates. Professional documentation acts as an “insurance policy” that protects you against these risks.

How does EFEKTA support companies during a tax audit?

We provide full representation before tax authorities. We prepare substantive explanations, firmly defend the adopted valuation methods and comparative analyses, and ensure that the audit proceeds strictly according to the letter of the law, minimizing stress and risk for our clients.