Strengthen your cross-border Transfer Pricing position

As Swedish multinational groups expand operations in Poland, Transfer Pricing (TP) compliance may become a critical part of their tax strategy. Poland’s TP landscape is both complex and heavily regulated – with strict documentation requirements, regular updates, and significant penalties for non-compliance. Swedish-based multinational groups with operations or affiliates in Poland should therefore consider enhancing cross-border cooperation on TP, which would allow ensuring that all intra-group transactions are fully compliant with local TP regulations as well as aligned with broader group-level policies.

TP in Poland has become an important area of concern for both taxpayers and Polish tax authorities. Taxpayers focus on the dynamically changing reporting obligations and the risk of high penalties, while the Polish tax authorities treats this area as one of its key fiscal policy priorities, in line with the strategy of the Polish Ministry of Finance.

According to the recent data provided by the Polish Ministry of Finance, the National Revenue Administration in Poland has achieved notable growth in the effectiveness of audits over the past few years. Between 2020 and 2024, the effectiveness of audits (in percentage terms) has more than doubled, considering the data both for tax audits as well as customs and tax audits. More importantly, the percentage of TP audits (tax audits) that ended with assessment of the taxpayer’s additional income in 2023 was 23%, while in 2024 – it reached a massive 70%. 

The best way to mitigate the above risk (as well as other risks associated with potential tax audit in the field of TP) is to ensure that local transfer pricing documentation (Local File), including TP analyses and group transfer pricing documentation (Master File) are properly prepared.

First of all, it must be noted that, in light of the Polish TP regulations, Local File is required for transactions between related entities that exceed the following thresholds in a tax year:

• PLN 10,000,000 – for the sale or purchase of goods;
• PLN 10,000,000 – for financial transactions;
• PLN 2,000,000 – for service transactions and other types of transactions.

For transactions involving entities located in so-called “tax havens”, the documentation thresholds are significantly lower:

• PLN 2,500,000 – for financial transactions;
• PLN 500,000 – for transactions other than financial transactions.

If an entity meets the above mentioned conditions, it must, in principle:

• Prepare Local File, including TP analyses* – by the end of the 10th month following the end of the tax year;
• Submit the TPR information to the Polish tax authorities – by the end of the 11th month following the tax year.

*TP analysis needs to be updated at least every 3 years, unless a change in the economic environment significantly affecting the analysis prepared justifies an update in the year in which such change occurs.

Moreover, entities belonging to groups with a consolidated turnover exceeding PLN 200 million in the previous fiscal year must prepare a Master File, which provides a broader overview of the group’s TP policies. The deadline for attaching the Master File to the Local File is 12 months after the end of the tax year.

Some inconsistencies between Swedish and Polish TP documentation can be often observed for the same transaction. For example, if a Swedish entity describes a transaction as involving routine distribution functions, while the Polish counterparty identifies entrepreneurial risk-taking, this misalignment raises “red flags” in terms of TP. Consistent functional analysis is not just best practice – it’s an important requirement. To avoid such pitfalls, Local File should not only comply with local TP regulations, but also reflect the content of the group’s Master File, group strategy and policies. Ensuring coherence across borders helps mitigate TP risks and creates a more defensible TP position.

Failing to meet TP obligations can lead to severe financial consequences. If the Polish tax authorities determine that a taxpayer has not adhered to the arm’s length principle, they may impose adjustments to taxable income and additional tax liabilities.

Consequently, the difference between the taxpayer-determined income and the adjusted taxable profits is subject to an additional tax rate:

• Standard 19% corporate tax rate applies to reassessed taxable income;
• An additional 10% penalty tax rate may be imposed on the reassessed income.

In certain cases, the penalty tax rate may increase:

• 20% – in the event of failure to submit TP documentation (or submission of incomplete TP documentation) or if the basis of the additional tax liability exceeds the amount of PLN 15 million – in respect of the excess over that amount;
• 30% – in the event of failure to submit TP documentation when, at the same time, the value of the basis for determining the additional tax liability exceeds PLN 15 million.

Additionally, the following penalties under the Fiscal Penal Code (KKS) must be considered:

• Failure to prepare Local File, providing TP documentation inconsistent with actual transaction details or failing to attach the required Master File can result in fines of up to 720 daily rates (currently approx. PLN 44 million);
• Late preparation of TP documentation may result in fines of up to 240 daily rates (currently approx. PLN 14 million);
• Failure to submit the TPR information or providing data inconsistent with Local File or actual transaction details can result in fines of up to 720 daily rates (currently approx. PLN 44 million);
• Late submission of the TPR information may result in fines of up to 240 daily rates (currently approx. PLN 14 million).

Given the above TP obligations and sanctions, it is not enough to simply “tick the box” with TP documentation – it must be robust, accurate, and defensible in the event of an audit. Swedish-based multinational groups with operations or affiliates in Poland should not therefore consider TP documentation as merely a compliance obligation, since such documentation may constitute a critical safeguard against financial and reputational exposure. 

For these reasons, it may be crucial to look for support from someone who fully understands the nuances of functional profiles, value chains, and business models, as well as who has proper tools to align documentation strategies across multiple jurisdictions. KPMG’s experts are deeply experienced in cross-border documentation and inter-firm alignment. Reach out to our TP Team to make sure that your TP documentation is not just compliant, but consistent and strategically sound.

Do also make room in your calendar for the joint webinar arranged by KPMG Sweden and Poland on 26th of May, at 10.00 – 11.00, for a deep dive into the Polish transfer pricing and compliance landscape. 

Read more and register here.

Contacts
Sivert Aronsson
sivert.aronsson@kpmg.se

Birgitta Hellberg
birgitta.hellberg@kpmg.se

Jakub Roszkiewicz
jroszkiewicz@kpmg.pl

Tomasz Klusek
tklusek@kpmg.pl