Maja Seliga-Kret, Mateusz Janiak

The article discusses when to recognise a transfer pricing adjustment relating to any period before 2019, when the CIT Act did not offer a detailed framework specifically governing the timing of TP adjustments for the purposes of taxable income or tax costs. Under the CIT Act in force before 2019, a TP adjustment may be recognised in the accounting period in which the adjustment document was received/issued or when the payment was received/the cost was incurred. Tax authorities are not consistent in their approach here. There have been as many as 13 cases since 2016 when the Director of National Revenue Information decided that, under the law in force until 31 December 2018, a TP adjustment should be recognised by reference to the time when the adjustment document was issued/received, and only five cases when the decision was that the recognition should proceed under the general rule, i.e. by reference to the time the payment was received or the cost incurred.