Poland: Increased number of transfer pricing audits, increased assessments

Poland: Increased number of transfer pricing audits

A summary of the results of tax audits conducted in the first half of 2016 reveals an increase in the number of transfer pricing audits conducted in Poland. In the first half of 2016, the tax auditors made determinations imposing more than PLN 9.5 billion in additional tax assessments (compared to the previous year, an increase of 36.6%). Officials expect that by the end of 2016, the amount of total assessments will exceed PLN 20 billion (approximately U.S. $5.2 billion).

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Strategy of tax auditors

The efficiency of the transfer pricing tax audits is seen as being derived from changes in the strategy pursued by the tax audit authorities. Based on tax audits conducted in the first half of 2016, the new strategy appears to include the following objectives:

  • Increased focus on transfer pricing
  • Extension of the covered period
  • Increase in a number of tax auditors and the quality of inspections

Because there are new tax auditors equipped with more sophisticated audit tools, the extent of transfer pricing audits can be expected to grow. There is a greater likelihood of a tax audit for loss-making entities or those with high debt ratios. The high-risk group also includes entities that were involved in restructuring processes (i.e., transfers of economically important functions, assets or risks between related parties).

 

Read an August 2016 report [PDF 361 KB] prepared by the KPMG member firm in Poland

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