Year 2024 in transfer pricing: most important tax rulings and cases

Radosław Chudy

Transfer pricing adjustments, which have for years been the issue surrounded by the greatest uncertainty, were also the dominant topic in tax ruling applications in 2024. The tax authorities responded to this interest by issuing several dozen rulings. All that shows that the underlying law (Article 11e of the CIT Act or PIT Act) and the related guidance remain unclear for taxpayers and require further elaboration, says Radosław Chudy, Sendero Tax & Legal’s transfer pricing expert.

Year 2024, which ended recently, again showed how big an impact the case law of tax tribunals and the tax rulings by Director of National Revenue Information have on the enforcement and application of transfer pricing regulations. They give a glimpse of what issues are the permanent bone of contention with tax authorities, as well as showing which TP regulatory areas remain unclear for taxpayers. Clearly the underlying law is in need of reform.

In 2024 tax tribunals gave more than 50 judgments (some of which are still open to appeal) of crucial importance for the interpretation and application of TP regulations. On the other hand, the number of tax rulings concerning this area exceeded 150.

Let’s take a closer look at some of them.

Supreme Administrative Court causes a shake-up in the transfer pricing world

One of the most important decisions of the top tax court (Supreme Administrative Court, or “SAC”) is its judgment of 3 Sep 2024 in case number II FSK 815/24. The case concerned a group of companies treated as a single (consolidated) taxpayer for corporation tax purposes and the issue was whether a transaction made by one of the group companies with an entity from outside the group will cause the group to forfeit the single-taxpayer status if the transaction was not at arm’s length. In that case the question asked was what if the company identified the non-compliant transaction, duly changed the transaction terms and adjusted its own taxable income or deductions, while the group amended its annual tax return, paying the delinquent tax with interest. SAC responded by taking a hardline pro-fiscal stance which gave the industry a veritable “shake-up”. The top tax court firmly held that if such a transaction is not at arm’s length, the tax group forfeits its single-taxpayer status by operation of law. The decision already spurred voices that the tax group regulations need urgent changes.

For the full text, see Prawo.pl:
https://www.prawo.pl/podatki/ceny-transferowe-2024-najwazniejsze-interpretacje-i-wyroki-rchudy,531585.html