Intra-group loans
Related parties may make loans to each other within the capital group. Signing a contract and using these funds may trigger transfer pricing documentation obligations. For this to happen, however, certain conditions must be met. Which ones? Cyprian Werykowski - tax adviser, director at Thedy & Partners - explains in an interview with the fpg24 portal.
The issue of accounting for loans between related parties has recently been the subject of a rather interesting tax interpretation. However, before we discuss it, can we remind you when we are dealing with related parties?
The definition in the provisions of the Act is quite complicated, but it can be pointed out in a nutshell that if we are talking about related parties, these are entities, one of which exerts significant influence on at least one other entity or entities, e.g. through a relevant share of capital or personal links.
And what obligations are we talking about in terms of transfer pricing documentation for related parties?
These obligations are defined in such a way that related parties are obliged to prepare, in electronic form, local transfer pricing documentation for the tax year (by the end of the tenth month after the end of the tax year) in order to demonstrate that the transfer prices have been set at arm’s length, i.e. those that unrelated parties would have agreed between themselves.
Then we should still mention the statutory limits on which the fulfilment of the reporting obligations depends.
This is true. For the regulations specify that local transfer pricing documentation is prepared for a controlled transaction of a homogeneous nature, the value of which exceeds in a tax year the documentation thresholds indicated in the Act:
1) PLN 10,000,000 – in the case of a commodity transaction.
2) PLN 10,000,000 – in the case of a financial transaction.
3) PLN 2 000 000 – in the case of other transactions, including service transactions.
It is also worth mentioning that related entities obliged to prepare local transfer pricing documentation and those benefiting from an exemption from the obligation to prepare such documentation shall submit to the head of the tax office competent for the taxpayer (by the end of the eleventh month after the end of the tax year) information on transfer prices for the tax year, prepared according to the template of an electronic document published in the Public Information Bulletin on the website of the entity office serving the Minister of Finance, i.e. TPR-C or TPR-P forms.
Whole interview: Intra-group loans [OUR INTERVIEW WITH CYPRIAN WERYKOWSKI] – Forum Polskiej Gospodarki (fpg24.pl)