Transfer pricing issues in taxation of related entities
Transfer pricing issues in taxation of related entities

Summary/Abstract: The paper discusses the issue of transfer pricing associated with the taxation of transactions between entities affiliated personally or in capital. A phenomenon of described herein takes place in situations where these links result in the understatement of income and failure to show the income by the related entities. The main reasons for this phenomenon and the methods of limiting thereof are presented here. In addition, the issue of pricing agreements (APA) is touched. In conclusion, the tax regulations discussed are intended to reduce the incidence of shifting the profits between affiliated companies. In the current economic environment, it is not an easy task, since the benefits accruing from this practice are significant. Therefore, the temptation to use the mechanism of transfer pricing is high. Certainly, reducing the tax burden and simplifying the tax system should promote the elimination of such practices from the polish economic life.

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