Since 1 January 2019, certain elements of the Local File and the Master File have been amended, and the criteria for the identification of documentation have also been changed in a significant manner. At present, it is no longer important what revenues or costs were generated for the preceding year in order to determine documentation obligations, as was the case in 2017–2018.

Based on the regulations currently in force, the documentation obligation arises depending on the net value of the homogenous controlled transaction which exceeds the following thresholds in the financial year:

  • PLN 10 million – for commodity and financial transactions,
  • PLN 2 million – for service transactions and other transactions,
  • PLN 100 thousand – for transactions consisting in the payment of amounts due to entities having their registered office in the so-called tax havens (it also refers to the deeds of a company/partnership which does not have a legal personality and joint venture agreements, etc.)

The documentation thresholds are determined separately for each homogeneous controlled transaction, regardless of the assignment of the controlled transactions to commodity, financial, service or other transactions, and separately for the cost- and revenue-generating part of a given taxpayer.

Furthermore, it should be noted that since 2019 the transfer pricing analysis (the benchmarking analysis or the so-called compliance analysis) has been an obligatory element of the Local File. The only exception from that rule includes the transactions to which taxpayers apply the so-called simplified settlement rules (safe harbours).

The most important changes in the transfer pricing documentation effective since 2019

Local File

It should be emphasised that in 2019 there were no radical amendments made to the obligatory elements of the Local File. In relation to the part of the documentation dealing with the related entity, certain new elements were introduced. They concern but are not limited to the following:

  • the identification of geographical markets where the related entity performs business activities;
  • the description of the industry and market environment, with the identification of the influence of economic and regulatory circumstances, and with the description of key competitors, and
  • the information about economically significant functions, assets or risks influencing the related entity which have been transferred by and between the related entities in the financial year and in the year preceding the documented financial year if such transfer occurred.

Furthermore, since 2019, it has been necessary to explain the assumptions made within the description of the manner of transfer pricing calculation. The obligation to present the added value chain and functional profile of the parties to the documented transactions was withdrawn in 2019 in relation to the Local File.

Transfer pricing analysis

An important change in the transfer pricing analysis effective since 2019 includes the identification of the method applied to verify the prices together with the concise justification of the selection of a given method with the justification of the selection of search criteria. In addition, the comparable data has to be presented in an electronic form allowing its editing, grouping, sorting and performing the verification of the calculations made. Furthermore, since 2019, the comparable data rejected under the transfer pricing analysis have been an obligatory element of the benchmarking analysis. Another equally important change concerning the transfer pricing analysis is the identification of the elements of the so-called compliance analysis in the case when the preparation of the benchmarking analysis is not possible or adequate in view of the transfer pricing verification methods provided for in the regulations. In addition, it is also required – within the transfer pricing analysis – to view the transfer price in terms of the result of the analyses, together with the explanation of possible deviations.

Master File

The most important changes in the scope of the Master File apply to the new way of defining the obligation to prepare the Master File. The obligation to prepare it occurs if the following three conditions are fulfilled cumulatively:

  • the entity is obliged to prepare the Local File,
  • it belongs to the group of related entities for which consolidated financial statements are drawn up,
  • the consolidated revenues of the group of related entities exceed PLN 200 million in the preceding financial year.

The new requirement provides for the inclusion of the information concerning the added value chain for five groups of products or services which are the most significant in terms of revenues and such groups of products or services which generate the revenues exceeding 5% of the consolidated revenues of the capital group, together with the identification of the main geographical markets for such groups of products or services. Furthermore, the new formal requirements for the Master File provide for the inclusion of the concise description – with words – of the functional analysis presenting the significant share of the related entities in the creation of the value within the capital group; the attachment of the consolidated statements of the group and the inclusion of the list and concise description of the unilateral advance pricing agreements concluded by the entities from the group or other tax binding rulings concerning the assignment of the income between the countries. The Master File may be drawn up by any entity belonging to the Group. Yet, the Master File submitted in Poland has to be compliant with the Polish regulations. When the Master File has been drawn up in the English language, the tax authority may demand that the Master File be submitted in the Polish language (within 30 days of being served such a demand).

Important deadlines

Upon the entry into force of the Act dated 19 June 2020 on subsidies to interest rates of bank loans granted to enterprises affected by COVID-19 and amending certain other acts (the so-called “Anti-Crisis Shield 4.0”), the deadlines for transfer pricing reporting were extended. Under the Anti-Crisis Shield 4.0, the official deadlines for the submission of the following documents were prolonged until 31 December 2020:

  • transfer pricing information (TPR-C and TPR-P forms), and
  • statement on preparation of the Local File.

The above refers to cases when such deadlines expired between 31 March 2020 and 30 September 2020. If the said deadlines expire between 1 October 2020 and 31 January 2021, the taxpayers are granted three additional months for the fulfilment of their relevant reporting obligations. Furthermore, the Anti-Crisis Shield 4.0 also provides for the postponement of the deadline for preparing or attaching the Master File to the Local File until the end of the third month from the day following the day when the extended deadline expired for filing a statement confirming that a local transfer pricing documentation (the Local File) has been prepared. For taxpayers whose financial year ended on 31 December 2019, it means that:

  • the deadline for preparing the Local File, filing TPR-C transfer pricing information returns and filing the statement on the preparation of the Local File expires on 31 December 2020; and
  • the deadline for preparing or attaching the Master File to the Local File expires on 31 March 2021.


The new transfer pricing documentation regulations, effective since the beginning of 2019, have significantly changed the existing approach in many aspects, including in relation to the determination of the documentation obligations imposed on the related entities or the inclusion of the transfer pricing analysis to the Local File every single time. At present, the main purpose of the transfer pricing documentation is to evidence that a controlled transaction is the arm’s length one, and not taking into account all formal elements of the documentation. In spite of the relatively small number of formal changes introduced to the scope of the Local File and the Master File and the prolonged deadlines for reporting, the taxpayers should commence the diligent fulfilment of the documentation obligations for the year 2019 as soon as possible, especially given the connection of the information included in the Local File with the new reporting of transfer pricing information (TPR-C and TPR-P form).


Tomasz Szczepanek, Senior Manager in Transfer Pricing Team at KPMG in Poland
Robert Żaczek, Consultant in Transfer Pricing Team at KPMG in Poland