There are new clarifications of the MF regarding transfer prices
This time the document concerns the net transaction margin method and these are the fourth clarifications published by the MF on transfer pricing.
The document is dated 1 December 2021 and runs to 24 pages. This time, the finance ministry focused on the practical aspects related to the application of the net transaction margin method (MMTN). In the material, the department took into account recommendations developed, among others, within the Transfer Pricing Forum. So what can we find in the latest explanations?
– The largest part of the MF document is devoted to the use of MMTN in practice. As the ministry reminds, MMTN allows for the verification of transfer prices. It enables the determination of a financial indicator that reflects the relation of the net profit margin achieved by the audited entity in a controlled transaction to the relevant base. This ratio, in turn, allows the assessment of economic dynamics, such as the profitability of transactions. The net profit margin is calculated on the basis of revenues obtained from the controlled transaction less costs related to this transaction. The MF also explains that the net profit margin should be understood as various profit categories, including mark-ups. Thanks to MMTN, it is possible to verify whether the level of net profit margin is determined at the market level – points out only a part of MF’s explanations Łukasz Kupryjańczyk, tax advisor, partner at Thedy & Partners.