POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
not regarded as a tax-deductible expense for the part in which they were earmarked directly or indirectly for capital transactions, particularly the purchase or acquisition of shares (stock), the acquisition of all rights and obligations in a partnership without legal personality, additional contributions, share capital increases or the purchase of own shares for redemption. Costs that are not deducted in a given year due to the above mechanism may be carried forward for up to five consecutive tax years. 5.6 Transfer Pricing In Poland, transactions between related par - ties (defined on the principle of a 25% owner - ship stake interpreted broadly, including not only shares but also, for example, certificates in investment funds or similar instruments) should be done on an arm’s length basis. Where appli - cable, transfer pricing documentation must demonstrate that all relevant transactions have been executed on terms that would have been applicable to unrelated parties. The requirement to prepare the transfer pricing documentation applies in respect of transac - tions with a value of: • PLN10 million for commodity and financial transactions; and • PLN2 million for services and other transac - tions not included above. Lower thresholds of PLN2.5 million in the case of a financial transaction and PLN500,000 in cases other than a financial transaction apply to trans - actions with related parties based in countries that would be tax havens under the OECD rules. The transfer pricing rules include a simplification whereby a mark-up of 5% is applied to certain low-value services, such as accounting, human resources, IT services and general services of an
administrative and office nature, in recognition that these services are provided at arm’s length. It is possible to obtain an advance pricing arrangement from the tax authorities. An updated list of tax havens came into force on 1 January 2025, according to which the Princi - pality of Andorra is no longer classified as a tax haven. 5.7 Anti-Evasion Rules In 2016, Poland introduced rules on counteract - ing tax avoidance – ie, any act that satisfies both of the following conditions: • it was effected primarily for the purpose of obtaining a tax advantage that, in the given circumstances, is an advantage contrary to the subject and purpose of tax law; and • the party that carried out the act acted in an artificial manner. The tax consequences of an act identified as having been effected primarily with the aim of achieving a tax advantage are determined based on the state of affairs that would have existed if an “appropriate act” had been effected. Where circumstances indicate that the achievement of a tax benefit was the only purpose of carrying out the act, the tax consequences are deter - mined in such a way as if the act had not been carried out. To obtain protection against the application of anti-avoidance rules in respect of a transac - tion in the future, a company or individual may apply for a so-called security ruling. The author - ity decides on the application over six months, and may refuse to issue a ruling if the application relates to a case of tax avoidance.
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