Are transfer pricing adjustments subject to VAT?

Even though a vast majority of private tax rulings confirm that transfer pricing adjustments made to ensure compliance with the arm’s length principle are not subject to VAT, the issue still raises significant doubts.

Sometimes, following the end of the year, it turns out that a business has failed to reach the arm’s length margin in a related-party transaction. In this situation, to make an appropriate transfer pricing adjustment, the parties engage in so-called profitability adjustments. It is worth considering whether such adjustments are subject to the goods and services tax.

Read the whole article by tax advisor Adam Wnuk on Rzeczpospolita’s website at https://kancelarierp.pl/czy-korekty-dochodowosci-podlegaja-vat