How transfer pricing became the key to business survival – a new era of TP audits

Today, it can be said with confidence that transfer pricing in Poland has evolved from a formal documentation requirement into a key area of tax risk management.

For entities belonging to groups of related enterprises, this means a fundamental change in approach — from reactive compliance with obligations to proactive minimization of audit risk, which may result in multi-million adjustments to taxable income.

Increasing effectiveness of tax audits

In 2024, the National Revenue Administration (Krajowa Administracja Skarbowa – KAS) achieved twice the effectiveness in detecting irregularities in transfer pricing compared to the previous year.

In the first half of 2025, the scale of tax shortfalls was already 30% higher than in the entire year 2023.

The number of audits is decreasing — from over 350 in 2020–2023 to approximately 270 in 2024 — but their effectiveness has increased significantly.

In 2024, more than 50% of audits ended with an income adjustment, and the total amount of adjustments exceeded PLN 750 million, i.e. twice as much as in 2023.

The greatest difference in effectiveness can be observed between customs and tax offices (UCS) and standard tax offices.

UCS offices are responsible for over 90% of the identified understatement of income, becoming specialized units in the area of transfer pricing audits.

Profiles of taxpayers most frequently audited

Tax authorities select entities for audits that exhibit financial patterns suggesting potential transfer pricing manipulation, including:

• companies reporting losses for more than one tax year, especially routine entities,
• enterprises with low profitability inconsistent with sector trends,
• entities incurring high costs of group support services,
• companies with a high share of debt in financing their activities.

Special attention is paid to financial transactions — authorities analyze not only interest rates but the entire financing structure.

In cases of excessive indebtedness, part of the debt financing may be recharacterized as equity, excluding part of the interest from tax-deductible costs and increasing taxable income.

Example: The Podlaskie KAS revealed that a consumer electronics company overstated its costs by PLN 186 million, reporting a loss instead of income, which resulted in an additional nearly PLN 4 million in CIT payable.

New and existing data sources of tax authorities

Transfer Pricing Information (TPR) and CIT returns

TPR data enables authorities to compare applied prices with arm’s-length ranges and identify manipulation of analyses.

Authorities can also verify the correlation between transactions with related parties and the occurrence of CIT losses.

IFT forms

These disclose financial flows from Poland to other jurisdictions — e.g. payments for intangible services, interest, and amounts subject to withholding tax (WHT).

JPK_CIT and KSeF – a revolution in access to data

With the obligation to use the National e-Invoicing System (KSeF) and to submit JPK_CIT files, tax authorities gain unprecedented access to financial data.

This allows them to analyze, among others:

• cost structures and transactions with related parties,
• changes in profitability,
• unit prices of goods and services,
• links between counterparties,
• potential restructurings without remuneration.

Public Country-by-Country Reporting (Public CbCR)

From 2026, large capital groups (with revenues exceeding EUR 750 million or PLN 3.5 billion) will be required to publish data on taxes paid by jurisdiction.

This will be another source of information on international tax settlements.

Global minimum tax (Pillar II)

New reporting related to the top-up tax will disclose the effective taxation of companies in individual countries.

It applies to groups with revenues above EUR 750 million, imposing a minimum CIT rate of 15%.

A revolution in combating aggressive tax planning

In August 2025, the Minister of Finance established a Task Force for Combating Aggressive Tax Planning in CIT, which is developing recommendations in four areas:

• international CIT systems,
• harmful planning patterns,
• resilience of the tax system,
• international cooperation.

At the same time, a KAS Competence Center for Combating Aggressive Tax Planning was established in Kraków, using advanced data analytics based on TPR, CIT, JPK_CIT, and KSeF data.

High specialization of tax officials

KAS auditors are increasingly well prepared substantively — they have undergone training in the OECD Guidelines and use multiple data sources: financial statements, TPR, CIT, IFT, and soon also JPK_CIT, KSeF, and Public CbCR.

This enables them to benchmark taxpayers’ results against other entities with a similar business profile.

Presidential strengthening of audits

In August 2024, a presidential bill was submitted to the Polish Parliament, under which CIT taxpayers with revenues exceeding PLN 5 billion would be audited in the area of transfer pricing at least once every three years.

The draft also provides for:

• doubling tax penalties (from 10% to 20%),
• expanding the scope of published financial data.

Key conclusions for businesses

The conclusions are clear:

• the priority for enterprises should be limiting the risk of initiating an audit, as once an audit begins, defense options are significantly limited.

In practice, this means the need for:

• a proactive approach to TP documentation,
• pricing transactions before they are entered into,
• regular updates of benchmarking studies,
• implementation of benefit test mechanisms,
• inclusion of TP aspects in business decisions.

Expert support from Legal Link

At Legal Link, we have specialized in transfer pricing services for years, offering comprehensive support in:

• preparation of TP documentation and analyses,
• development of transfer pricing policies,
• implementation of benefit test mechanisms,
• advisory services for business decisions with TP risk taken into account.