Transfer Pricing Documentation

Transfer pricing documentation is structured on three levels and includes:

• local file, including a comparability analysis,
• group file,
• country-by-country report (CbCR).

Local Transfer Pricing Documentation (Local File)

This is a formal legal requirement imposed on taxpayers by the regulations of a specific country. It involves preparing a document that describes the transaction or group of transactions subject to this obligation in accordance with tax guidelines and regulations. The documentation must include:

• description of the related entity,
• description of the transaction, including a functional, risk, and asset analysis,
• transfer pricing analysis including benchmarking study,
• financial information.

Comparability Analysis for Transfer Pricing

As part of the local transfer pricing documentation, this demonstrates the market-level fairness of transfer pricing. It involves a detailed analysis of transactions between related and independent entities, comparing financial and commercial data.

Group Documentation (Master File)

Group documentation applies to capital groups (consolidating their revenues) and includes information about the entire group of related entities.

Country-by-Country Reporting (CbCR)

CbCR is a notification requirement for providing information about a group of entities. It applies to entities that are:

• the ultimate parent (dominant) entity in a group,
• entities consolidating financial statements,
• entities conducting direct or indirect business outside Poland,
• entities with consolidated revenues exceeding EUR 750 million in the previous year in Poland and globally.

More details about transfer pricing documentation can be found at cenytransferowe.org, managed by DMS Tax, a firm specializing in tax advisory in the following areas:

• Transfer Pricing Documentation – Ongoing preparation of documentation to reduce risk and ensure compliance.
• Tax and Legal Proceedings – Assisting clients with tax audits, legal proceedings, and appeals in administrative courts.
• Tax Audits – Helping clients navigate the increasing scrutiny of transfer pricing by tax authorities.