New statistics from the Ministry of Finance regarding APA – advance pricing agreements

We have the most fresh statistics from the Ministry of Finance regarding APA. Since 2006 when APA was introduced to the Polish tax system there were 50 applications place by taxpayers: 41 were finalized in the form of a decision or a resolution of the tax authorities: of this number 36 were only with the Polish tax authorities, 5 were with two tax authorities – Polish and other state. 4 decisions were issued to prolong the previous APA.  2 applications  were withdrawn. 

The majority of the applications covered  a trans action between a dominating entity from another state – Polish  dependent entity.

Most frequently the recognized method was the Net Transaction Margin Method (NTMM).

It takes up to 6 months to reach the agreement  with the Polish tax authorities;  when two tax authorities are involved then it takes up to 12 months.

Before the application is placed, the taxpayer has the possibility to discuss beforehand with the authorities  about the purpose of the agreement, scope of data requested, and time when such an agreement can be reached.

Such an agreement does reduce the tax risk in transactions between related entities.

We recommend to try at least the consultation phase, which does not cost anything.

Such an application can be placed by a local entity or  an entity from another state.

Source: TCA Advisers, Internet site of the Association: cct.org.pl.