This is to let you know that the Finance Minister has published official guidance on safe harbour provisions for loans and bonds. According to this guidance, the base rate and margin announcement dated 21 December 2018 will continue in effect also in 2020.
You may remember that compliance with that announcement is one of the requirements for the application of transfer pricing safe harbour provisions in Article 23s of the PIT Act and Article 11g of the CIT Act.
Where safe harbour applies:
- the taxpayer is not required to prepare a comparability analysis / conformity description for the transaction concerned;
- the tax authority will not assess taxpayer’s interest income/loss on the transaction.
As explained by the Finance Minister, until a new announcement is issued, taxpayers will continue to apply the base rate and margin from the 21 December 2018 announcement to their loan and bond transactions also in 2020 for the purposes of the safe harbour provisions.
Note also that the use of safe harbour provisions for lending transactions is reportable in accordance with Polish MDR legislation.
See the link below for the FM’s guidance in Polish:
https://www.podatki.gov.pl/ceny-transferowe/wyjasnienia/uproszczenia-typu-safe-harbour-w-roku-2020/
The base rate and margin announcement can be found here:
http://dziennikustaw.gov.pl/MP/2018/1286
If these issues pertain to your business and you are interested in our assistance, please contact us.
This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.