Amendment of transfer pricing regulations

Publication / 20.01.2017

On January 1, 2017, amended provisions of the Personal Income Tax Act and the Corporate Income Tax Act came into force, introducing changes regarding transfer pricing documentation. The main purpose of the amendments is to implement into the national legal order the EU regulations on the common system of taxation applicable to related companies and to introduce requirements common to EU countries related to documentation of transactions between related parties.

The amended law requires taxpayers to prepare documentation containing a description of the transaction, and introduces, among other things, no need to document transactions with entities owning directly or indirectly less than 25% of shares. This change is crucial, as the previous threshold for capital ties has been raised from 5% to 25%. Also new is the obligation to prepare a comparative data analysis, which will have to be updated at least once every three years.