Transfer pricing has long been one of the most sensitive and closely monitored areas of tax law. Tax authorities place great emphasis on the transparency of transactions carried out between related entities, and businesses increasingly face not only the obligation to prepare transfer pricing documentation, but also extensive reporting duties. One of these is the TPR information – a report that enables the tax administration to analyse risks and verify the arm’s-length nature of the terms applied in related-party transactions.
Although the TPR is sometimes treated as a purely technical supplement to the documentation, in reality it is a document requiring exceptional diligence, consistency and a thorough understanding of the regulations governing controlled transactions. Below, we explain what the TPR is, who is required to file it and how to prepare such a report properly to minimise the risk of disputes with the tax authorities.
What is TPR Information?
TPR Information (Transfer Pricing Report) is a detailed report submitted to the tax authorities containing data on transactions carried out between related entities as well as selected transactions with entities located in so-called tax havens. It includes:
- the taxpayer’s financial information,
- the characteristics of the transactions,
- the transaction value,
- the methods used to verify compliance with the arm’s-length principle,
- statements confirming that the conditions applied in the transactions are consistent with the arm’s-length standard.
The TPR functions as a tool – it enables tax authorities to identify potential irregularities already at the reporting stage and subsequently direct control resources towards areas where the risk of income understatement is elevated. For this reason, its preparation requires high accuracy and full consistency with the transfer pricing documentation.
Who is required to file a TPR?
The obligation to file a TPR primarily applies to related parties that engage in transactions exceeding statutory documentation thresholds. These thresholds determine when a taxpayer must prepare local transfer pricing documentation and, consequently, also report the structure and conditions of such transactions in the TPR. Importantly, the thresholds are analysed for controlled transactions of a homogeneous nature, rather than for individual contracts, invoices or payments. This means that even several smaller transactions that are economically homogeneous may, when aggregated, exceed the documentation threshold.
For goods and financial transactions, the threshold has been set at PLN 10 million, while for service and other transactions it is PLN 2 million. Crucially, these values are determined separately for the cost and revenue sides, regardless of the number of related counterparties or the number of accounting documents relating to a given category of services. In practice, this means that the taxpayer must analyse the total value of all services of the same type purchased from related entities or all homogeneous services sold to such entities, irrespective of how many agreements cover these services.
It is important to note that even if the taxpayer meets the conditions for statutory exemptions from preparing documentation – for example, exemption for domestic entities that have not incurred a tax loss and do not have a support decision – this does not necessarily exempt them from filing a TPR. The report serves a separate informational function, and in many cases must be filed even in the absence of documentation.
The obligation to file a TPR also applies to taxpayers conducting transactions with entities established in countries and territories applying harmful tax competition. In such cases, tax authorities assume a higher risk of aggressive tax planning, which justifies the expanded reporting requirements.
Deadlines and rules for filing the TPR
The TPR must be submitted by the end of the eleventh month following the end of the tax year. For businesses using the calendar year, this consistently means a deadline of 30 November of the following year. The document must be filed exclusively electronically, in XML format, via the e-Declarations system or the e-Tax Office platform.
The form must be signed with a qualified electronic signature by the head of the entity (e.g. a member of the management board). The TPR may be signed by a proxy only if they are a tax advisor, attorney, attorney-at-law or statutory auditor.
Failure to file the TPR, filing it late or providing incorrect information may result in severe fiscal penal sanctions, which makes this obligation particularly important.
Common errors and risks associated with the TPR
The most frequent errors in TPR preparation stem from data inconsistencies – for example, discrepancies between the scope of transactions included in the documentation and those reported in the TPR. Another common issue is the omission of multi-year transactions, such as loans, which, although concluded in previous years, continue to have financial effects in the following year. Taxpayers also frequently misclassify transactions, misinterpret documentation thresholds or overlook the fact that the reporting obligation may also apply to transactions with tax-haven entities.
TPR information has become one of the key control tools in the area of transfer pricing. Its accurate preparation requires analysing group structures, identifying homogeneous transactions, determining their value, assessing documentation obligations and ensuring consistency with local documentation and the company’s financial data.
A lack of diligence in this area may lead to serious consequences – both for the business and for those responsible for signing the report. Therefore, the TPR should be regarded not merely as an administrative obligation, but as an important element of building tax security within the organisation.
If you need assistance with preparing local transfer pricing documentation, group documentation, benchmarking analyses or the TPR itself, our firm can support you throughout the entire process – from risk assessment to final submission of the report.