Polish transfer pricing regulations adopt a broad and sometimes non-obvious approach to defining what constitutes a controlled transaction. As a result, taxpayers in Poland may find that arrangements they would not typically associate with transfer pricing, may, in fact, fall within the scope of documentation and reporting obligations.
Transfer pricing is often associated with recurring, well‑known patterns: the sale of goods between related entities, standard support services, or intra‑group financing. These are the areas taxpayers typically have “on their radar” – both in terms of documentation, transfer pricing analyses, and reporting obligations. However, under Polish transfer pricing regulations, the challenge begins where a transaction does not resemble a “typical transaction”. In practice, such situations are far more common than one might expect.
Transactions of a non‑standard nature are frequently overlooked by taxpayers, even though, from a transfer pricing perspective, they may trigger documentation requirements just as extensive as those applicable to traditional sales or service transactions. An additional difficulty is that some of these transactions do not always have a direct impact on the profit and loss account, making them even harder to identify at first glance.
Before turning to examples of less intuitive transactions, it is worth briefly situating the discussion within the framework of Polish transfer pricing regulations. Under the Polish Corporate Income Tax Act (and, respectively, the Personal Income Tax Act), transfer pricing obligations revolve around the notion of a controlled transaction carried out between related entities (in certain cases, transfer pricing documentation obligations may also apply to transactions – other than controlled transactions – carried out with entities located in jurisdictions applying harmful tax competition). The statutory definition of a controlled transaction is intentionally broad and covers not only classic commercial dealings but also any identifiably economic activities whose terms are influenced by relationships between parties.
At the same time, the concept of relatedness itself extends beyond direct capital links to include personal relationships and situations involving actual decision‑making influence. As a consequence, the Polish regime adopts a substance‑over‑form approach, requiring taxpayers to look beyond formal contractual structures and assess whether a given arrangement reflects conditions that would have been agreed between independent entities. This wide regulatory scope forms the backdrop for the analysis of “non‑obvious” transactions and explains why many business events—although not perceived as transactions in a traditional sense—may nonetheless fall within the scope of transfer pricing rules and trigger documentation obligations.
This article opens a series dedicated to transactions that taxpayers do not intuitively associate with transfer pricing, although under current regulations in Poland they require particular attention. In subsequent publications, we will examine selected categories of such arrangements, addressing common practical uncertainties and challenges related to their proper identification and documentation. We will also demonstrate that, while these issues may initially appear complex, with the right awareness and preparation they are not as complex as they initially seem.
The catalogue of transactions subject to transfer pricing regulations is not limited to “regular” sales invoices. The legislation uses the concept of a controlled transaction, which in practice covers a very broad spectrum of business events—often extending beyond standard commercial settlements. Importantly, proper identification of such transactions cannot rely solely on a literal interpretation of the law and implementing regulations. Conclusions in this area also stem from general rulings, guidance provided in Q&A sections relating to TPR forms[1], and administrative court jurisprudence. As a result, determining which business events qualify as controlled transactions can be a complex process and often constitutes a real challenge for taxpayers.
In cross‑border contexts, the complexity of the controlled transaction definition may lead to an asymmetrical approach to the same business event on both sides of the transaction. In practice, situations arise where a Polish entity is required to treat a given arrangement as subject to transfer pricing obligations, while the foreign counterparty—operating under a different regulatory framework—does not identify a corresponding obligation. Such inconsistencies further complicate the identification process and highlight the importance of an individual, in‑depth analysis of each case, particularly in international dealings.
Below are selected examples of transactions that frequently are subject to doubts:
The absence of remuneration does not necessarily mean the absence of a transaction. Free-of-charge support, provision of resources, know-how, or personnel between related parties may still trigger documentation obligations—especially where such benefits generate measurable economic value for the recipient.
Another illustrative example is a free-of-charge guarantee. The lack of a fee does not imply that no transaction has taken place and, consequently, that no documentation requirements arise. The line between permissible use of a group brand and free use of marketing resources generally lies between a passive “group affiliation effect” and active, organised marketing support. As a rule, merely indicating affiliation with a corporate group (e.g. neutral use of the group name) is considered part of operating within a group structure and does not constitute a separate service.
However, where group support goes beyond this and includes visual identity, assistance in social media activities, or preparation of marketing materials, such cooperation may take on an operational and marketing character. If provided free of charge, it may be qualified as a non‑remunerated service requiring transfer pricing analysis and potentially documentation.
Transfers of functions, assets, or risks within a group are often mistakenly perceived as purely business operations. From a transfer pricing perspective, however, restructurings frequently constitute some of the most complex transactions, requiring comprehensive economic analysis, valuation, and proper documentation of any compensation (or lack thereof) due to the restructured entity.
Transactions with entities resident or managed in so‑called jurisdictions applying harmful tax competition are subject to a specific tax regime. Poland has a broader list of countries and territories applying harmful tax competition than the EU. The Polish list includes 25 countries. In such cases, documentation thresholds are significantly lower than for standard intra‑group transactions. Notably, transfer pricing obligations may arise even where the parties are unrelated. The key factor is not the relationship between counterparties, but their tax residence—often a surprising aspect for many taxpayers.
It is important to note that recharging costs “without a markup” does not automatically exempt a taxpayer from transfer pricing obligations. Unless all statutory conditions for documentation exemption are met, such transactions may be subject to the same requirements as standard related‑party transactions. In practice, this means that a seemingly neutral settlement mechanism must still be assessed from a transfer pricing perspective.
Allocating income to a foreign permanent establishment by the head office is one of those areas that does not, at first glance, resemble a typical transaction that falls into TP obligations. In practice, however, it often requires more complex analysis than many “standard” intra‑group transactions. This is why the OECD has developed detailed guidance governing the relationship between a head office (HQ) and a permanent establishment (PE), treating them as if they were separate economic entities. These guidelines are applied in Poland despite not being incorporated into national legislation.
Transfer pricing is typically associated with large corporations and sophisticated structures. Increasingly, however, it also affects individuals—even those not engaged in business activity.
Voluntary share redemption without remuneration is often regarded as a neutral corporate action outside the scope of transfer pricing. In practice, however, it may constitute a controlled transaction of significant economic relevance. From a transfer pricing standpoint, the key issue is whether such an arrangement reflects market conditions, what business rationale underlies it, and whether the absence of remuneration is economically justified.
In practice, local entities often formally contract with independent counterparties, while key terms—such as pricing, margin levels, or settlement models—are determined centrally at the group level. Even in the absence of formal capital or personal links between the contracting parties, such transactions may be classified as controlled transactions.
This issue has become a focal point for taxpayers particularly following a general ruling of the Minister of Finance, which emphasised that the existence of a controlled transaction is not determined solely by the formal status of the contracting parties. What matters is the actual influence of related entities on transaction terms—especially where centrally imposed conditions limit negotiation autonomy and result in terms differing from those that would be agreed between genuinely independent parties.
Importantly, the scope of such transactions can be much broader than commonly assumed and largely depends on the level of centralisation within the group, the scale of operations, and the specific business model.
It should be emphasised that the examples above represent only selected categories of non‑standard transactions. In practice, virtually any non‑typical business event within a group should also be assessed from a transfer pricing perspective. The absence of a “classic” transaction structure does not relieve taxpayers of their obligations—on the contrary, it often makes compliance more complex.
“Non‑obvious” transactions frequently attract particular attention from tax authorities. The reason is simple—they are harder to identify, less standardised, and more likely to give rise to interpretative discrepancies. Restructurings, non‑remunerated benefits, and income allocation to permanent establishments are areas where authorities are especially keen to verify whether taxpayers have correctly identified the nature of the transaction, determined appropriate remuneration, and ensured arm’s length conditions.
An additional challenge is the frequent lack of reliable comparables in such cases, which further increases tax risk.
This article opens a series of publications dedicated to transactions that often fall “outside the standard framework” from a taxpayer’s perspective, yet require particular attention under transfer pricing regulations. In subsequent publications, we will take a closer look at selected categories of such arrangements, discussing practical challenges, potential risks, and issues related to their proper identification and documentation.
Because in transfer pricing, the most contentious transactions are not those everyone knows… but those no one expects.
Transfer pricing risk often lies where no one anticipates obligations. The Quantera Global Network supports clients in identifying such situations, organising documentation, and ensuring compliant and secure settlements. Please feel free to contact us.
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.
[1] The TPR form is a detailed electronic tax report required in Poland. It provides tax authorities with data on transactions conducted between related parties and transactions involving entities based in “tax havens”.
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