Changes to transfer pricing regulations

Important tax statutes signed by President

In October 2026, President signed eight Acts and decided not to sign three others.

The Acts signed included:

• Act amending the Excise Duty Act, introducing uniform rules for the taxation of electronic cigarettes and vaping devices. The new provisions are to enter into force 14 days after their publication.
• Act amending the Local Taxes and Fees Act, the Personal Income Tax Act and the Tax on Civil Law Transactions Act, increasing the exemption threshold for tax on civil law transactions on sales of movable property from PLN 1,000 to PLN 3,000. The new provisions are to enter into force on 1 January 2027.
• Act amending the Personal Income Tax Act and the Corporate Income Tax Act, providing, among other things, for the removal of sanctions applicable to taxpayers that enter into transactions with an active VAT taxpayer and make payments to an account not included on the so-called white list, or make payments without using the split payment mechanism. It also removes the declaration from the TPR information return. The new provisions are to enter into force 14 days after their publication.

On 9 October 2026, the Council of the European Union updated the EU list of non-cooperative jurisdictions for tax purposes.

Following the update, Panama and Vietnam were removed from the list. Both jurisdictions were moved to the list of cooperative jurisdictions after taking action to address concerns previously identified in the area of tax good governance.

The Council of the EU also noted the progress made by Vanuatu on tax transparency. However, Vanuatu remains on the list because unresolved issues persist in other areas. The Council also identified continuing concerns regarding Anguilla, which has not addressed problems relating to the operation of its tax information exchange system.

As a result, the updated list now comprises eight jurisdictions: American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

On 16 October 2026, the Government Legislation Centre published the draft Regulation of the Minister of Finance and Economy amending the transfer pricing regulation concerning personal income tax and the draft Regulation of the Minister of Finance and Economy amending the transfer pricing regulation concerning corporate income tax.

The proposed changes are intended to:

• introduce specific rules for financial transactions into Polish tax law, in the form of a separate chapter, Chapter 4A, in the Transfer Pricing Regulation. The proposed chapter would supplement and clarify the general principles arising from the Personal Income Tax Act, the Corporate Income Tax Act and the Transfer Pricing Regulation concerning the conduct of comparability analyses for financial transactions. The chapter is intended to reflect the specific nature of financial transactions;
• remove interpretative doubts concerning the provision on compensating adjustments by introducing clarifying and streamlining amendments, and align the concept more closely with that presented in the OECD Guidelines. In particular, the proposed changes would:
  • abolish the distinction between benefit compensation and income compensation, retaining only benefit compensation, which could be made in the same tax year or across different tax years within a period of three consecutive tax years; and
  • clarify the conditions to be assessed when analysing compensating adjustments.

The draft regulations are currently at the consultation stage, with the expected entry into force on 1 January 2027.

In its judgment of 15 October 2026 in case C-203/25, the CJEU considered a situation in which the direct recipient of a dividend is regarded as its beneficial owner, holds substantial assets and carries on genuine business activity, while the tax authorities consider that the recipient’s group structure may have been established for tax avoidance purposes.

The CJEU held that, in such circumstances, the tax authorities may levy withholding tax on the dividend.

The Court emphasised that factors relevant to establishing the existence of a non-genuine arrangement include, first, the fact that the amounts transferred through a chain of transactions, at least some of which are fictitious, are similar or even identical to the dividends paid by a subsidiary established in that Member State to its parent company established in another Member State and, second, the fact that the amounts were transferred continuously over a specified period. This is without prejudice to the tax authority’s obligation to carry out an objective analysis of all relevant facts and circumstances to determine whether the conditions for an abusive practice have been met.

Moreover, the tax should be levied even if the company paying the dividend was unaware of the abuse, provided that at least one entity in the chain of relationships, or a person obtaining the tax advantage, knew or could have known about it.

In its judgment of 14 October 2026 in case T-569/25 (X-GmbH), the General Court considered the good faith of a reseller applying the VAT margin scheme.

The General Court held that the reseller’s good faith as to whether the supplier had met the conditions for applying the margin scheme should be examined in the proceedings determining the VAT liability. EU law precludes a practice under which that circumstance may be taken into account only in separate proceedings based on equitable considerations and the authority’s discretion. The assessment of good faith should therefore form part of the comprehensive determination of the facts in the tax assessment proceedings.

In a judgment of 9 October 2026 (case file II FSK 1377/23), the Supreme Administrative Court held that the 24-month exclusion from the right to elect lump-sum tax on company income also applies to an acquiring company in a merger by acquisition. It is irrelevant that the acquiring entity retains its legal existence and is not a newly formed company. Consequently, it may not elect Estonian CIT immediately after acquiring another company.

In one of its judgments issued in the preceding week (case file II FSK 1431/24), the Supreme Administrative Court held that compensation awarded by the President of the Energy Regulatory Office in respect of electricity costs may constitute income from activities carried on in a special economic zone. If the electricity is used directly to manufacture products at a plant operating in the special economic zone under a permit, the compensation remains connected with the zone-based activity and qualifies for the corporate income tax exemption under Article 17(1)(34) of the Corporate Income Tax Act.