Recent times have seen a growth in the number of taxman’s audits targeted at the pricing businesses apply in transactions with their related parties. The tax authorities are making use of an increasingly broader array of tools to verify whether transfer prices applied in related party transactions are at arm’s length. For example, they use paid-access databases that allow them to compare the financial performance of controlled entities with that of other market players. Taxpayers themselves generally use the same databases to prove that their transfer pricing is at arm’s length – in accordance with the transfer pricing documentation regulations in force as of 1 January 2017. As can be seen in practice, it can be quite a challenge to properly use the new tools and to draw the right conclusions from benchmarking studies.
For the full text of the article in Polish, see Rzeczpospolita on-line and here.