In keeping tax documentation regarding transfer pricing, it is required to carry out important but difficult tasks that result from modern regulations of tax law.

Tax regulations in Poland as well as in other countries require the taxpayer to set the prices and other conditions of transactions with affiliated entities and entities coming from tax havens in such a way that they reflect the prices and conditions of the market. We offer to implement in our clients’ businesses professionally-developed documentation that meets legal requirements and protects them against negative fiscal consequences.


In order to eliminate the effect of special conditions on transactions between affiliated entities, OECD member states adopted the “arm’s length principle,” which can be explained as a principle of market pricing. This principle is an international norm agreed upon by OECD countries and used to determine transfer pricing for tax purposes. Article 9, paragraph 1 of the Model Tax Convention describes the principle of transfer pricing in the following way: "Where…conditions are made or imposed between…two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly."

Using the principle of market prices in determining transfer pricing leads to a comparison of transactions between affiliated entities with comparable transactions between independent entities in comparable circumstances, where members of the group are treated as independently-operating units rather than inseparable parts of one company.

A very significant obstacle in using the principle of market prices is often attaining information on comparable transactions. Access to such information could be confidential or simply nonexistent.

Using the principle of market prices involves comparing conditions of transactions between affiliated entities (controlled transactions) with conditions of such transactions between independent entities (uncontrolled transactions). The conditions and circumstances of controlled transactions are therefore compared with uncontrolled transactions.

According to OECD guidelines, comparable transactions are those in which none of the possible differences between comparable transactions or between entities comprising these transactions could significantly affect the price of the subject of the transaction, and it is possible to make rational adjustments which would eliminate any effect of these differences. When comparing conditions of transactions, it should be remembered that all meaningful differences between comparable transactions or enterprises should be taken into account. 

The question of transfer pricing is today’s most complicated question of tax law. When it comes to the study of transfer pricing, economic conditions and the complexity of today’s international transactions mean that there are no universal or fixed rules as to how to proceed. A comprehensive analysis of the state of affairs and an individualized approach to each case are of primary importance.

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Audytor-31Mirosław Bogusławski was entered into the register of auditors, maintained by the National Chamber of Statutory Auditors, under number 9796.
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We base our activity on administrative court rulings. The Central Database of Administrative Court Rulings is published on the NSA (Supreme Administrative Court of Poland) webpage NSA.