Transfer pricing may be present in the activities of international companies that have subsidiaries, branches in different countries. Globalization and open markets determine the importance of transfer pricing for tax purposes. Briefly about the regulation of transfer pricing in Poland and EU countries - in this article.

Transfer pricing involves the application of approaches to determining prices for products (goods, services) that are transferred between divisions of one company (group of companies) as related parties and, as a rule, located in different countries, in order to avoid applying a lower level of taxation. The main principle of transfer pricing accounting is the application of market prices and conditions to transactions between related parties of one company (group of companies).

The main regulatory document in the field of tax regulation of transfer pricing is the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, 1995 with the latest amendments in 2022. The OECD Guide for Multinational Enterprises and Tax Authorities is a detailed commentary on transfer pricing. The content of the OECD Guidelines is accepted by all OECD member countries and generally constitutes a standard of conduct for both related entities and tax authorities. The OECD guidelines may form a direct element of the national legal order or (as in Poland) form the basis for the construction of national tax rules in the field of transfer pricing.

The OECD recommendations on transfer pricing include two groups of price comparison methods, based on:

Transaction analysis:

• comparable uncontrolled price method,
• resale price method,
• cost plus method.

Profit analysis:

• transactional net margin method,
• transactional profit split method.

The transfer price analysis methodology includes an analysis of the functions, assets and risks , используемых связанными сторонами внутри компании. При этом функции, риски и актused by related parties within the company. At the same time, the functions, risks and assets of the parties to the transfer transaction are interconnected in relation to the production of goods, the implementation of works, services and have appropriate responsibility for their use, quality, etc. Functional analysis is aimed at determining the degree and nature of participation of the parties in the controlled transaction, the sources of generating the company's revenue (incurring costs) and possible reasons for the difference in the indicators of the analyzed parties of the controlled transaction from the indicators of independent companies.

Transfer pricing in the EU is regulated by the activities of an advisory body to the European Commission in the form of Joint Transfer Pricing Forum, which has developed a number of practical recommendations in the field of transfer pricing. The work of the JTPF, along with the development of guidelines and recommendations (EU Transfer Pricing - Guidance) regarding transfer pricing, includes a special mechanism for resolving disputes in transfer pricing cases - the Arbitration Convention.

Transfer pricing regulation in Poland takes into account and is based on the provisions of the OECD guidelines. The main tax rules in the field of transfer pricing in Poland are contained in the laws on personal income tax and corporate income tax, in additional regulations. Here you can find general information on transfer pricing regulation regarding the three levels of documentation:

• local transfer pricing documentation,
• group transfer pricing documentation,
• country-by-country reporting (CbC-R).

Also, here are basic conditions for reporting on transfer pricing, the use of "safe harbors", other relevant issues.