Poland - Proposed Transfer Pricing Rules Target Financial Transactions and Compensating Adjustments

Summary

Poland has proposed amendments to its transfer pricing regulations that would introduce specific rules for financial transaction comparability analyses and revise the provisions governing compensating adjustments. The proposed changes aim to clarify the applicable rules and bring them closer to the OECD Transfer Pricing Guidelines. The draft regulations are at the consultation stage, with a proposed effective date of January 1, 2027.

Key Points

1. New rules for financial transaction comparability analyses

The draft would introduce a new Chapter 4A, Financial Transactions, into the Polish transfer pricing regulations. The proposed provisions are intended to supplement and clarify the general rules for conducting comparability analyses in financial transactions, taking into account their specific characteristics.

The analysis would consider the actual nature of the transaction, the circumstances and perspectives of the parties involved, and the realistic alternatives available to them. These considerations are relevant to intragroup financing arrangements, including loans, guarantees and cash-pooling arrangements.

2. Changes to compensating adjustments

The draft would remove the distinction between benefit compensation and income compensation, retaining a mechanism based on the compensation of benefits. Under the proposal, benefits arising from transactions between the same related parties could be taken into account within the same tax year or across a period of up to three consecutive tax years.

The proposed amendments would also clarify the factors to be assessed when determining whether a compensating adjustment is appropriate. The objective is to reduce interpretative uncertainty and align the Polish rules more closely with the OECD Transfer Pricing Guidelines.

3. Proposed effective date

The draft regulations are currently at the consultation stage. Their proposed effective date is January 1, 2027. The proposals have not yet been finalized and may change during the legislative process.

Practical Considerations

Multinational groups with Polish entities should review whether their financial transaction analyses and supporting documentation adequately demonstrate the economic substance of intragroup financing arrangements. Interest rate benchmarking alone may not be sufficient; groups should also be prepared to substantiate the actual nature and terms of each transaction, the perspectives and realistically available options of the parties involved, and relevant factors such as borrower creditworthiness and implicit group support.

Gathering this information may require closer coordination between tax, treasury and finance teams. Groups should also review how they identify and document compensating adjustments across related-party transactions and tax years in anticipation of the proposed changes.

Source

Government Legislation Centre (Rządowe Centrum Legislacji):

Draft regulation amending the transfer pricing regulation for corporate income tax — Project No. 1052.

Draft regulation amending the transfer pricing regulation for personal income tax — Project No. 1051.

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Disclaimer

This content is for general informational purposes only and does not constitute professional advice.

Information provided herein is based on publicly available sources as of the publication date and may be subject to change.

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