When discussing free-of-charge benefits in transfer pricing, most taxpayers automatically think of guarantees granted within capital groups. This is hardly surprising: for years, these arrangements have been at the center of the tax authorities’ attention in Poland. If, thanks to the support of a parent company, an entity is able to obtain financing on more favorable terms or obtain a loan at all, the natural question arises: should such support remain free of charge?
In practice, however, the topic of free-of-charge benefits extends far beyond financing. In many capital groups, knowledge, experience, expertise, human resources, IT tools and organizational support are exchanged on a daily basis. Very often this happens entirely informally and without any remuneration, because the parties treat such activities as a natural part of operating within a single organization.
This is where the greatest challenges begin. Where does an ordinary benefit resulting from membership in a capital group end, and where does a benefit begin for which an independent entity would be willing to pay? When is the absence of remuneration justified from a business perspective, and when may it be challenged by the tax authorities? Should every action resulting in benefit received from a related party be recognized for transfer pricing purposes?
In the following sections, we look at precisely these less obvious situations. We explain why the absence of remuneration does not always mean the absence of a controlled transaction, and which free-of-charge benefits most often result in transfer pricing risks. This is an issue worth analyzing carefully, especially because some of the most significant tax risks may not be visible at first glance.
A free-of-charge benefit may be understood as a situation in which one entity obtains a specific benefit at the expense of, or as a result of the actions of another entity, without providing remuneration in return (resolution of the Polish Supreme Administrative Court of 18 November 2002, FPS 9/02). In the context of capital groups, this may take various forms: from marketing support, through making know-how available, to using human resources, IT systems or procedures developed at group level.
For transfer pricing purposes, the key issue is primarily to determine whether a given activity constitutes a benefit provided to a specific related party, and whether the recipient obtains a measurable economic benefit as a result.
For example, if a group company receives ready-made advertising materials from the headquarters and uses them, receives support in conducting a marketing campaign, or gains access to specialist know-how that would require a cost to acquire from third party, the question may arise whether this type of support should be recognized as a controlled transaction.
In transfer pricing, the key point is whether activities of an economic nature take place between related parties and whether the terms of those activities correspond to market conditions.
Definitely yes. Free-of-charge benefits may be subject to transfer pricing obligations in Poland, including verification against documentation thresholds. For the purposes of determining the value of a controlled transaction, the market value of the relevant support should be taken into account, rather than the remuneration actually received, which in such a case is none.
This does not, of course, mean that every free-of-charge activity should immediately be valued and subject to taxation.
In practice, taxpayers usually have no difficulty identifying services for which an invoice has been received. It is much more difficult to identify benefits that leave no trace in the books.
No cost in the profit and loss account, no payment and no agreement often lead to the mistaken belief that there is no transfer pricing subject.
Meanwhile, during tax audits in Poland, the tax authorities increasingly analyze not only accounting data, but also information from other sources, such as the Master File, management reports, content published on websites or provisions of agreements concluded with unrelated parties. Such information is used, among other things, to verify the arm’s length nature of settlements and to assess whether the taxpayer has correctly recognized income from a free-of-charge benefit, and whether transfer pricing documentation obligations have been properly identified and fulfilled.
The following may be relevant, among others:
It is precisely such documents that may show that services were provided between related parties, even though they were not formally settled.
For this reason, the identification of controlled transactions should not be limited solely to financial data. In many cases, it is also necessary to involve business, marketing, IT, HR or operational departments, which often have the best knowledge of what day-to-day cooperation within the group actually looks like.
There are situations in which the absence of remuneration may be justified. This applies, among other things, to:
It should be remembered, however, that classifying a given benefit as an effect of group membership does not automatically determine the absence of tax consequences. Each case requires an individual assessment and appropriate business justification.
One of the more problematic areas is distinguishing passive benefits resulting from mere membership in a group from active provision of services or making resources available.
After all, not every benefit associated with belonging to a group necessarily constitutes a service. A company operating within a recognized international group often benefits from:
These are so-called passive benefits. They arise, in a sense, automatically as a result of participation in the group, and not as a result of a specific action performed for a given company.
Therefore, simply posting information on a website about membership in a capital group should, as a rule, not be viewed as a separate benefit.
The situation is different where the group undertakes active actions directed at a specific entity.
For example, it may:
In such cases, it is difficult to speak only of passive use of the group’s reputation. The company receives specific support that may have a measurable impact on its business.
The line between the “group effect” and a free-of-charge benefit is not always clear. In practice, it runs between passive use of benefits resulting from group membership and active support provided to a specific entity. For this reason, each case should be analyzed individually.
One of the basic tools helpful in assessing free-of-charge benefits is the so-called benefit test, i.e. an analysis of whether the recipient actually obtained a benefit from a given activity.
In practice, it is worth verifying several issues:
If the answers to these types of questions are affirmative, it is difficult to argue that the activity has no economic value.
It should be remembered, however, that the first step is to determine whether, in a given case, there is any service between related parties at all. Only after such a benefit has been identified is it possible to perform the so-called benefit test, aimed at assessing whether the absence of remuneration for that service is justified. It may turn out that the recipient does not obtain any measurable benefit from a given activity and, consequently, the absence of remuneration will not raise concerns from a transfer pricing perspective. At the same time, in line with the draft amendments to Chapter VII of the OECD Guidelines published on 1 June 2026, it is worth noting that the OECD is placing increasing emphasis on the benefit test in the area of intra-group services.
Free-of-charge benefits remain one of the most underestimated areas of transfer pricing. In practice, many entities focus on transactions that are accompanied by an invoice or a cash flow, while material obligations for Polish taxpayers may also arise from benefits provided without formal remuneration. The absence of payment does not automatically mean the absence of a controlled transaction. The key question is whether the recipient obtained a specific, measurable economic benefit that an independent entity would be willing to acquire for remuneration.
Both operational and financial benefits require particular attention. The first category may include, among other things, free-of-charge access to know-how, marketing support, use of human resources, IT systems or intangible assets. The second may include free-of-charge guarantees, provision of collateral or assumption of credit risk. It is precisely these “invisible” flows that often escape taxpayers’ attention and, at the same time, may generate significant transfer pricing risks.
It is equally important to correctly distinguish between benefits resulting solely from membership in a capital group and actual support provided by one entity to another. Mere operation within the structures of a strong group does not always mean that a service or another benefit subject to transfer pricing rules arises. However, if the group engages its resources, assumes risks or undertakes specific actions leading to the company obtaining a measurable benefit, such a situation should be analyzed in terms of compliance with the arm’s length principle.
A regular review of free-of-charge benefits not only helps reduce tax and documentation risks, but also makes it possible to better understand the actual operating model of the capital group. In the world of transfer pricing, it is the economic substance of business relationships – rather than their name, form or the absence of an invoice – that most often determines the tax consequences.
Wondering whether benefits occurring within your group may be subject to transfer pricing regulations? Contact us or Enodo’s experts. We will help you identify potential risks, assess tax consequences and prepare practical solutions tailored to the specific nature of your organization’s business.
This article was prepared by Enodo Advisors, a Member of the Quantera Global Network. Enodo Advisors is based in Poland and is specialized in Polish Transfer Pricing while providing a broad tax services offering in Poland.
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