On 29 September 2020, a draft bill amending the corporate income tax (CIT) laws was submitted to the lower house of the Polish parliament. The amendments include following proposals related to transfer pricing.

• Extends the application of the arm’s length principle, especially where the beneficial owner is seated in a tax haven.
• The requirement to prepare a Local file would be applied on taxpayers and “non-legal entities” for uncontrolled transactions with companies having their registered office or domicile, seat or seat in a tax haven, provided the transaction value for the tax year exceeds PLN 100,000. This provision will apply accordingly to taxpayers and entities without legal personality for controlled and/or uncontrolled transactions if the beneficial owner has their registered office or domicile, seat or place of management in a country or territory in which harmful tax competition prevails.
• The Local File should equally contain an economic justification for making the transaction in case of transactions with tax havens, especially a description of the expected economic and tax benefits.
• An exemption from the requirement to prepare transfer pricing documentation started from 31 December 2019 requiring there has been a 50% revenue reduction due to COVID-19 provided that the income generated in the said tax year by a an associated party which failed to meet this condition was lower by at least 50% than the total revenue gained in the corresponding period of the previous tax year.
• An exemption from the requirement of a declaration by an affiliate stating that the company made transfer pricing adjustments in the same amount for the tax year in which the COVID-19 state of emergency was in effect