Transfer pricing Planned simplifications to TPR-C: fewer formalities in transfer pricing reporting
Planned simplifications to TPR-C – fewer formalities in transfer pricing reporting
The proposed amendments to the PIT and CIT Acts introduce significant simplifications in the area of transfer pricing reporting. The changes are expected to primarily affect the TPR Information, including the TPR-C form submitted by CIT taxpayers.
The purpose of the draft legislation is to reduce formalities for taxpayers, simplify the rules for signing the information and reduce the scope of data reported by micro and small enterprises.
TPR-C Information without a separate declaration
One of the most important changes is the planned removal from the TPR-C Information of the declaration confirming that the local transfer pricing documentation has been prepared in accordance with the facts and that the transfer prices covered by the documentation are at arm’s length.
Currently, this declaration is part of the TPR-C Information, which also affects the rules for signing it. The draft legislation provides for the removal of this requirement. In practice, this would mean that TPR-C would no longer include this type of declaration and taxpayers would no longer have to submit it in the current form.
This does not mean, however, that the obligation to apply arm’s length prices or to prepare transfer pricing documentation will be abolished. The tax authorities will still be able to verify whether the terms of controlled transactions comply with the arm’s length principle and whether the local documentation reflects the actual course of the transactions.
Easier signing of TPR-C
The draft legislation also provides for the abolition of special rules for signing the TPR-C Information. Currently, the regulations specify who is authorised to sign TPR-C, in particular the head of the entity and, in the case of a multi-member governing body, a person designated from among that body.
As a rule, the TPR-C Information may not be signed by an attorney-in-fact, except where the attorney-in-fact is an advocate, attorney-at-law, tax adviser or statutory auditor.
After the changes, the TPR-C Information is to be signed in accordance with the rules applicable to electronically submitted tax returns. The draft provides that a power of attorney to sign electronic tax returns, granted under the provisions of the Tax Ordinance, will also include authorisation to sign the TPR-C Information.
In practice, this means that TPR-C may be signed by an attorney-in-fact holding the relevant power of attorney, in particular UPL-1. This solution may significantly streamline the reporting process in corporate groups and in entities where the preparation and submission of the form are coordinated by tax departments, finance departments or external advisers.
Effective date of the changes
The new regulations are generally expected to enter into force 14 days after the publication of the Act. However, concerning the TPR-C Information, they will apply to information submitted for a tax year beginning after 31 December 2025.
In practice, for taxpayers whose tax year corresponds to the calendar year, this means that reporting under the new rules will apply only to the 2026 tax year.
