Changes to the signing of the TPR form and local documentation, and an expansion of liability under the Tax Code regarding transfer pricing
Draft introducing changes regarding transfer pricing documentation published on the government’s legislative center website
On March 31 of this year, information regarding a draft law amending the Personal Income Tax Act, the Corporate Income Tax Act, and the Fiscal Penal Code was published in the Council of Ministers’ list of legislative and programmatic work.
According to its authors, the Ministry of Finance’s draft aims to reduce administrative burdens on companies, lower business operating costs, and increase the transparency of the tax system. In the area of transfer pricing (TP), the focus is primarily on simplifying reporting (TPR), while simultaneously expanding liability under the Fiscal Penal Code (KKS).
Key changes in the area of transfer pricing
The draft aims, on the one hand, to simplify reporting obligations for certain taxpayers, and on the other, to clarify regulations and expand the scope of liability.
The most important changes include:
- Simplification of the procedure for signing the TPR Information and a change in the rules for submitting the transfer pricing statement—the statement on the arm’s length nature of transfer prices is moved to the local documentation, meaning that the TPR Information will no longer require the signature of a board member. However, a board member will still be required to sign the statement, which is intended to be part of the local documentation;
- Exemption of micro- and small entrepreneurs from the obligation to indicate in the TPR Information the values of general indicators that measure their financial situation;
- Introduction of criminal tax liability for preparing the Local File in violation of the formal requirements of the PIT/CIT Act.
According to the draft law, the new provisions will apply to TPR Information submitted for the tax year beginning after December 31, 2025. The exception is the regulations concerning criminal tax liability, which will enter into force on January 1, 2027. This means that the new regulations will apply to transfer pricing documentation and TPRs prepared for the 2026 tax year.
What does this mean for taxpayers?
The changes being introduced are intended to simplify the process by making it easier to submit the TPR form through the expansion of the list of persons authorized to file it to include any representative within the meaning of the Tax Ordinance. However, moving the declaration of arm’s length transfer pricing to the local documentation means that a member of the management board will still be required to provide a qualified signature—only the location of the signature (from the TPR to the transfer pricing documentation) and the deadline for its submission will change.
Please note that such a signature will serve as a “timestamp” in the local documentation, marking the final date of its preparation, i.e., by the end of the 10th month following the end of the tax year. For this reason, it will be essential to plan work on the local documentation well in advance so that it is fully ready by the statutory deadline.
Importantly, the draft proposes introducing liability under the Fiscal Penal Code for preparing local transfer pricing documentation in violation of the requirements of the PIT and CIT Acts. For example, criminal tax sanctions will apply in cases where the documentation does not contain the legally required statement in the local documentation. They may also apply if the documentation does not include any other element required by law.
We will monitor the progress of the draft and keep you informed of its final wording. In practice, it may have a significant impact on planning work related to tax documentation.
If you have any questions, please feel free to contact our team!
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