Changes of 17 June 2013 introduced to the Minister of Finance Decree on transfer pricing – part6: Restructurings of supply chains


The OECD Guidelines on Transfer Pricing indicate that in case of business restructurings the functions, including risks and assets should be analyzed before and after the restructurings.


For example: before the restructurings a full function manufacturer was selling goods to a related full function distributor. After the restructuring, the distributor is converted into a limited risk distributor or a commissionaire or an agent of some sort.


In order to determine an arm’s length compensation for the restructured entity and to answer the question which entity or entities from the Group shall bear that compensation it may be necessary to make an evaluation of the rights and obligations of the restructured entity under the pre-restructuring arrangements and also review the contractual provision or the provisions of the commercial law and also the manner and the extent to which the rights and obligations have changed as a result of the restructuring.


Even if the contract provides for a short term arrangement or at-will arrangement the actual conduct of the parties should be analyzed to see if the relation had a long-term nature and hence greater rights than those indicated by the contract.


In case there is no evidence of rights or obligations in a comparable situation the evaluation may be done on the basis of what rights and obligations would independent parties have put in place. In this process it is forbidden to use information that was not known to the parties at that time (hindsight).


Prepared by Tax Advisory Company TCA Advisers Sp.z o.o. , Konstancin-Jeziorna, Warsaw


NOTE: This material is prepared for information purposes only – care was taken to make it as simple and clear as possible, so it is not complete nor precise enough to the basis for any action in practice – therefore, in case you need to resolve your particular situation, please seek professional tax advice.


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