Tax commentaries within the scope of legal provisions referring to transfer pricing
New tax commentaries have been issued referring to the obligation of drawing up local documentation of transfer pricing for the so-called indirect paradise transactions referred to in Article 11o section 1a and 1b of the CIT Act and Article 23za section 1a and 1b of the PIT Act.
There they have explained, among others, issues relating to whether all contractors should be made subject to verification as regards the newly created limit of 500 thousand zlotys.
As the commentaries indicate, ”The use presented in Article 11o section 1a of the CIT Act of the defined in the Act term of the factual owner affects the scope of transactions subject to documentation obligation. Subject to the verification as regards the obligation created under Article 11o section 1a of the CIT Act are transactions connected with the settlement of the payment of the other party to the transaction (hereinafter referred to as ‘purchase transactions’).This refers to purchase transactions from the tax payer’s perspective, so the ones where it purchases goods or services as connected with the transfer of due payment to the other party of the transaction.”
This means that the verification under Article 11o section 1a of the CIT Act does not basically refer to transactions within the scope of which a taxpayer sells goods or provides services for the benefit of the other party to the transaction because they are connected with the settlement of payments for the benefit of a taxpayer.
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