We offer comprehensive support in the field of transfer pricing. Our transfer pricing advisory services aim to meet specific economic objectives while maximizing tax benefits and minimizing the risk of transactions being challenged by tax authorities.
What is Transfer Pricing and why is it so important?
Over the past few years, the transfer pricing area has become one of the most dynamic tax areas, in which entrepreneurs operating within capital groups have to deal with on a daily basis. They are obliged to ensure that the controlled transactions are carried out on arm’s length principle, i.e., on terms that would be accepted by independent enterprises. The arm’s length nature of settlements must also be ensured in the case of transactions conducted with counterparties from so-called tax havens.
Transfer pricing is a frequent subject of inspections and analyses by tax authorities, focusing on whether transactions between related parties are conducted on market terms and their possible impact on tax revenue. Statistics from the Ministry of Finance indicate that not only the number but also the effectiveness of transfer pricing inspections is increasing year by year, which means that taxpayers should prepare in advance.
KPMG helps clients that conduct transactions with related entities and with counterparties from tax havens to meet the requirements related to transfer pricing issues. The services provided are comprehensive and tailored to the individual needs of each client, often resulting from the unique nature of their business.
Deadlines for preparing documentation and reporting transfer prices
Transfer pricing obligations
Taxpayers conducting transactions with related entities are generally required to prepare local transfer pricing documentation (local file), which should contain a detailed description of the terms agreed between related entities as part of the controlled transaction, along with a description of the method for determining the transfer price. An important element of local transfer pricing documentation is also an analysis, which may take the form of a benchmarking analysis or a compliance analysis.
In addition, it is generally required to submit an annual transfer pricing information form (the so-called TPR form) to the relevant tax office, which includes key data about controlled transactions, as well as a statement confirming the arm’s length nature of the established transfer prices.
Benefits of KPMG’s transfer pricing advisory services
Implementation of effective settlement models between related entities, including modeling and creating the value chain of capital groups.
Verification of existing procedures and processes, including compliance with formal requirements.
Faster verification of achieved profitability ratios and effective control of specific transactions.
Possibility to automate time-consuming processes and reduce the occurrence of human errors.
Tax risk management through contact with a specialized team of advisors with comprehensive and up-to-date tax knowledge.
Certainty and peace of mind during audits, proceedings, and inspections conducted by tax authorities.
- Reduction of risks related to possible sanctions and criminal-fiscal liability resulting from failure to fulfill statutory obligations.
- Reduction of the risk of transfer prices established in transactions between related entities being challenged by tax authorities.
- Reduction of the risk of additional taxable income being assessed by tax authorities.
KPMG Support in Transfer Pricing
Below we present examples of transfer pricing support areas:
Transfer Pricing Documentation
›Ongoing Advisory
›Transfer Pricing Inspections and Proceedings
›Benchmarking and Compliance Analysis
›Transfer Pricing Reporting
›Agreements and Negotiations
›Technological Solutions
›Trainings and Workshops
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Transfer Pricing Documentation
- Determination of documentation obligations, including verification of the possibility of applying simplifications and exemptions specified in the CIT Act.
- Preparation or verification of local transfer pricing documentation, including transfer pricing analyses.
- Preparation or verification of group documentation, the so-called Master File.
Ongoing Advisory
- Advisory on effective–both in a business and financial terms– determination of settlements between related entities.
- Analysis of existing capital group structures and value chains within which related entities operate (so-called value chain analysis).
- Preparation or verification of remuneration calculation models between related entities for various types of transactions, including goods, services, or financial transactions.
- Support in creating effective financing structures, e.g., through the implementation of cash pooling systems or other structures tailored to the individual needs of a given group of related entities.
- Support regarding regulations on transfer pricing adjustments.
- Support in the process of identifying and documenting restructurings and calculating “exit fees”.
- Preparation of transfer pricing policies.
Transfer Pricing Inspections and Proceedings
- Analysis of existing documents to identify and mitigate sources of risk.
- Preparation of argumentation lines supporting the client’s position.
- Representation of the taxpayer before administrative courts and tax authorities.
- Preparation of “defence file” documents, constituting a set of evidence protecting the taxpayer against possible challenges to transactions by tax authorities and additional income assessments.
Benchmarking and Compliance Analysis
- Determining or verifying the arm’s length level of prices in controlled transactions between related entities through benchmarking analysis.
- Preparation of compliance analysis in cases where benchmarking is not possible.
- Preparation of a “defence file” analysis for restructuring processes related to, among others, the transfer of functions, assets, and risks between related entities.
Transfer Pricing Reporting
- Support in preparing transfer pricing information (TPR-C, TPR-P).
- Support in preparing information on the group of related entities (CbC-R, Public CbC).
- Support in preparing notifications regarding the obligation to provide information about the group of entities (CbC-P).
Agreements and Negotiations
- Comprehensive support in the process of concluding advance pricing agreements (APA/BAPA/multilateral APA), including assessment of the advisability of applying for APA/BAPA/multilateral APA, preparation of the application (APA/BAPA/multilateral APA), representation in the negotiation process, and support in the implementation of APA/BAPA/multilateral APA decisions.
- Advisory in preparing applications to initiate the mutual agreement procedure (MAP) and support in contacts with the Ministry of Finance.
Technological Solutions
In response to ongoing business changes, KPMG provides clients with dedicated technological solutions that streamline the management of transfer pricing matters.FinCalc Tool – a tool for estimating remuneration levels in financial transactions.
FinCalc Tool, developed by KPMG in Poland since 2018, is an advanced solution supporting the analysis of remuneration levels in selected financial transactions. Thanks to an intuitive spreadsheet, users can precisely determine remuneration based on individually specified criteria.
The tool is applicable to transactions such as:
- Loans;
- Bonds;
- Guarantees (sureties);
- Cash pooling;
- Other financial transactions.
With FinCalc, users gain the ability to transparently and reliably calculate remuneration in financial transactions, which supports informed business decisions and ensures compliance with regulations and best market practices in transfer pricing.
Trainings and Workshops
Organization of trainings and workshops on transfer pricing obligations and responsibilities, addressed both to employees of companies directly involved in day-to-day transactions with related entities and to management staff.
The workshops are conducted by advisors specializing in transfer pricing, who possess extensive knowledge based on current regulations as well as market experience and practice. The workshops and training sessions focus on practical aspects of transfer pricing issues and take into account the individual needs of participants.
About Us
As a team of approximately 70 professionals managed by 4 Partners with many years of experience, we are ready to support you in comprehensive advisory services related to transfer pricing. The KPMG team operates in 7 offices in Poland and is part of the global KPMG network, which ensures the highest quality of services for our clients. Our work and commitment are recognized annually in international and national rankings. KPMG’s transfer pricing advisory services are always aimed at achieving specific business objectives while maximizing tax benefits and minimizing the risk of transactions being challenged by tax authorities, allowing for the application of optimal settlement principles between related entities that are also compliant with tax regulations.
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