Maja Seliga-Kret, Bartosz Anulewicz, Adam Rajewski
Rzeczpospolita

After the Act of 29 October 2021 to amend the Personal Income Tax, the Corporate Income Tax and Certain Other Acts (“Polish Deal”) entered into force, one of the effects was that Article 11m of the Corporate Income Tax Act was repealed as of 1 January 2022. Pursuant to Article 11m, group companies obliged to prepare local files for transfer pricing purposes were required to submit to tax offices a representation that they have done so. Until then such a representation was signed by management as defined in the Accounting Act. As of 1 January 2022, the representation is part of the transfer pricing report.

Admittedly, the local file representation requirement under Article 11m continues to apply to transfer pricing documentation for 2021. But the Polish Deal legislation has also changed criminal tax law (Fiscal Penal Code, or FPC) to the extent it refers to transfer pricing documentation requirements. Specifically, by FPC Articles 56c and 80e, failure to submit a local file representation is no longer an FPC offence as of 1 January 2022.

Consequently, while managements continue to be required to submit local file representations for 2021, they will no longer be held liable under FPC for a failure to do so.

As of 1 January 2022, FPC punishments apply to various TP reporting offences, such as failure to prepare a local file and late preparation of a local file (but there is no punishment for failure to submit a local file representation). And the law has added a new category of persons who can be held liable for those offences. In addition to management (being member(s) of the managing body), liability can now attach also to persons in charge of the company’s business matters, including especially financial matters, such as chief accountant.