Double tax treaties and transfer pricing in Poland
June 03, 2008
Mike Ahern and Sebastian Lebda, of PricewaterhouseCoopers in Poland, discuss the relationship between tax treaties and transfer pricing
Poland has a network of 82 double tax treaties (DTTs). Out of these 82 DTTs, 78 are effective and four were signed but did not come into force (DTTs with Algeria, Nigeria, Uruguay and Zambia). The full list of the treaties may be found on the official website of Polish Ministry of Finance. The vast majority of these DTTs are based on OECD Model Tax Convention. For transfer pricing purposes the essential provision is article 9 which typically consists of two paragraphs. In essence article 9 par 1 allows one contracting state to make a transfer pricing adjustment in case of a transfer of profits to the other contracting state. Article 9 par 2 allows for making a corresponding adjustment by the contracting state and, therefore, aims at eliminating economic double taxation.
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