Minister explains what a homogeneous transaction is
The homogeneous nature of a transaction should be understood as similarity of the subject of the transaction and other key features of the transaction, relevant from the perspective of transfer pricing, according to the latest general interpretation of the Minister of Finance (DCT2.8203.2.2021).
The minister decided to clarify how to understand the definition of a controlled transaction of a homogeneous nature, as the provisions of tax acts do not specify this.
– It also follows from the MF’s interpretation that a controlled transaction of a homogeneous nature will also be a set of controlled transactions, which for the purposes of determining the value of a controlled transaction should be aggregated, due to their homogeneous nature. The MF document also emphasises that the concept of homogeneity of transactions refers to the understanding of the concepts of “transactions of one type” and “other events of one type”, which were used in the PIT and CIT Acts before 1 January 2019. Moreover, the term “homogeneity of transactions” is a clarification of these concepts. The key – as the MF stresses – for the determination of homogeneity is the similarity of essential characteristics of the assessed transactions, in particular within the scope of the elements of assessment indicated in Article 23w par. 4 and 5 of the PIT act and, respectively, in Article 11k par. 4 and 5 of the CIT act, and not the sameness of transactions – points out Cyprian Werykowski, tax adviser, director at Thedy & Partners.
What follows from the quoted legal regulations? The regulations indicate both the elements that should be taken into account when assessing the homogeneous nature of a transaction and the elements that do not affect the assessment of the homogeneous nature of the transaction.
– Determination of the nature and scope of the transaction is crucial due to documentation obligations. For a controlled transaction of homogeneous nature, whose value exceeds the documentation thresholds specified for particular types of transactions in Article 23w para. 2-2a of the PIT Act and in Article 11k para. 2-2a of the CIT Act, a local transfer pricing documentation is prepared, adds Cyprian Werykowski.
In the interpretation, the Minister of Finance discusses, among others, the scope of the regulations, the method of verification of transfer prices, homogeneity of haven transactions.
The MF’s interpretation is binding on all tax authorities.