- Many companies in capital groups make annual price adjustments in transactions with related companies to achieve target profitability.
- The question is whether these adjustments affect VAT settlements and how they should be documented.
- Transfer pricing adjustments are not regulated in the VAT Act, so analysis of the rules established in contracts or transfer pricing policies is necessary.
- There are three ways to document and report TP adjustments in VAT settlements, depending on the circumstances.
- If the adjustment is directly linked to a price change, it should be documented with a corrective invoice.
- If it is additional remuneration, it should be documented with an invoice.
- If it is not related to specific deliveries but compensates for profitability, it can be documented with an accounting note and remains outside the VAT accounts.
- The Ministry of Finance supports this approach in its tax clarifications.
- To determine the VAT implications, written rules for making adjustments should be in place.
- If the issue is significant, it may be advisable to request an individual tax ruling to avoid disputes during a tax audit.
Source: mddp.pl
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
