If a Polish business trades with a parent company, sister company or another related party, it must be able to demonstrate that the terms are arm’s length. Depending on the value and type of transaction, this may require a Local File and electronic TPR reporting, with separate rules for Master File obligations.
In simple terms, the company must be able to show that its related-party transactions are priced as if they were agreed between independent businesses. This is important because Polish thresholds can be reached faster than expected, and the obligations include documentation, electronic reporting, and potential penalties.
Who Counts as a Related Party?
Under Polish tax rules, entities are related where one has significant influence over the other — typically through at least 25% of shares, voting rights, or profit rights, or through actual influence over key business decisions. Related-party links may also arise through family relationships between individuals controlling separate businesses. A Polish branch or permanent establishment of a foreign company is also treated as related to its head office, so cross-border charges between them, such as management, IT, or license fees, fall within the transfer pricing rules.
Do You Need to Prepare Documentation? The Thresholds
Local transfer pricing documentation is generally required, when the annual value of a homogeneous related-party transaction exceeds the relevant net threshold. The main thresholds are:
- PLN 10 million for transactions involving goods (commodities) or financing
- PLN 2 million for service transactions and all other transaction types
Lower thresholds apply to transactions involving tax haven jurisdictions: PLN 2.5 million for financial transactions and PLN 500,000 for other transactions. These cases should be reviewed individually.
The thresholds are assessed by transaction type, not simply invoice by invoice. In practice, companies should monitor related-party transactions during the year, especially management fees, IT services, loans, guarantees, royalties, and cost recharges.
What the Local File Must Contain
The Local File explains who the related parties are, what transaction took place, which party performs which functions, and why the price is considered market-based. It usually includes a benchmarking or compliance analysis. The documentation must meet Polish requirements and must be prepared in Polish.
Master File and Country-by-Country Reporting: Not the Same Thing
Two additional obligations may apply to larger groups:
- Master File. Required for taxpayers belonging to groups that prepare consolidated financial statements and exceed PLN 200 million in consolidated revenue. It describes the group’s structure, business, and transfer pricing policy.
- Country-by-Country Reporting (CbCR). A separate obligation for the largest multinational groups with consolidated revenue above EUR 750 million.
The key point is that the EUR 750 million CbCR threshold is not the general Polish Local File threshold. Many Polish subsidiaries of much smaller groups may still have transfer pricing documentation obligations.
Reporting and Deadlines
In addition to preparing the Local File, taxpayers must submit electronic transfer pricing information to the Polish tax authorities using the applicable TPR form. For calendar-year taxpayers, the standard deadlines are:
- Local File: by the end of the 10th month after the end of the tax year
- TPR information: by the end of the 11th month after the end of the tax year
- Master File (where required): by the end of the 12th month after the end of the tax year
For example, for 2025 transactions of a calendar-year taxpayer, the practical Local File deadline falls at the beginning of November 2026 because 31 October is a Saturday, the TPR deadline is 30 November 2026, and the Master File deadline, where required, is 31 December 2026.
Exemptions and Safe Harbours
Some domestic transactions between Polish related parties may be exempt from the Local File requirement if detailed statutory conditions are met. Poland also has safe harbor simplifications for selected low-value intra-group services and certain financial transactions, but these apply only when all legal conditions are fulfilled.
Penalties for Non-Compliance
Non-compliance may lead to tax adjustments, additional tax liability, and personal fiscal penal liability for individuals responsible for the company’s tax settlements. This is why transfer pricing should be treated as a management-level compliance topic, not only an accounting exercise.
Advance Pricing Agreements: Getting Certainty in Advance
For more complex or high-value transactions, businesses may consider an Advance Pricing Agreement (APA) with the Polish tax authorities. An APA confirms in advance that the selected pricing method is acceptable for the transactions it covers, provided the agreed conditions are followed.
A practical year-round checklist
- Identify related parties and recurring intra-group transactions.
- Group transactions into homogeneous categories and monitor both revenue and cost sides.
- Track values against the applicable thresholds during the year.
- Assess exemptions and safe harbor conditions before relying on them.
- Confirm Local File, TPR and Master File obligations separately.
- Align agreements, accounting data, documentation and TPR reporting.
- Assign responsibility and prepare before the statutory deadlines.
How Leinonen Can Help
For companies operating in Poland, the practical challenge is often to identify early which intercompany transactions are relevant and whether Polish thresholds have been exceeded. The Leinonen team in Poland can review your related-party transactions, assess documentation and TPR obligations, and coordinate preparing the required Polish transfer pricing documentation. To find out more about transfer pricing and taxation support in Poland, get in touch with our team.
