The tax neutrality of a reorganisation and the arm's length character of settlements between related entities are two different tests, resting on different provisions. A division by spin-off may give rise to no revenue under Article 12 (art. 12) of the Corporate Income Tax Act (ustawa o podatku dochodowym od osób prawnych, the CIT Act) and nevertheless be a restructuring within the meaning of the transfer pricing regulation — with an obligation to examine whether the company being divided should receive remuneration for the profit potential transferred. The costliest mistake is to conclude that, because the transaction is neutral, there is nothing to establish. The opposite is true: it is precisely then that the transfer pricing documentation becomes the only evidence that the conditions corresponded to those on the market.
A corporate restructuring is not the same thing as a restructuring in transfer pricing
Proposition. The scope of the concept of "restructuring" in the transfer pricing rules does not coincide with the list of transactions in the Commercial Companies Code (Kodeks spółek handlowych, the CCC) — it is at once narrower and wider.
Statutory basis. Under § 2(1) (§ 2 pkt 1) of the Regulation of the Minister of Finance of 21 December 2018 on transfer pricing for the purposes of corporate income tax (rozporządzenie Ministra Finansów z dnia 21 grudnia 2018 r. w sprawie cen transferowych w zakresie podatku dochodowego od osób prawnych, the TP Regulation), a restructuring is a reorganisation which cumulatively involves "a material change in commercial or financial relations" (translation by the author), including the termination of agreements or a change in their material terms, and is connected with "the transfer between related entities of functions, assets or categories of risk", where the taxpayer's projected average annual EBIT over the three-year period following the transfer changes by at least 20% compared with the EBIT projected for the same years without the transfer.
Three consequences follow. Both conditions must be present together — a change of contract alone, without a transfer of functions, does not create a restructuring in this sense. The 20% threshold is measured by comparing two projections, not a projection with a historical result. And no corporate transaction is required: a restructuring may consist in a mere change to a distribution model or in the transfer of a sales team.
The relationship also works in the other direction. A merger of sister companies in which the functional profile of the parties does not change may fail to satisfy the second condition of the definition — which does not relieve anyone of the arm's length principle, because Article 11a(1)(6) of the CIT Act defines a controlled transaction broadly, as activity of an economic character identified on the basis of the parties' actual conduct.
Practice. Failure to meet the 20% threshold is not an exemption from analysis. The Recommendations of the Transfer Pricing Forum on the interpretation and scope of application of the provisions of Chapter 4 of the TP Regulation of 3 March 2020 (Rekomendacje Forum Cen Transferowych dotyczące interpretacji i zakresu stosowania przepisów Rozdziału 4 Rozporządzenia TP z dnia 3 marca 2020 r.) indicate that restructuring remuneration is not automatic, and that independent entities do not always obtain compensation for a reduction in profit potential. That document is not tax explanatory notes and gives no protection under Article 14n of the Tax Ordinance (Ordynacja podatkowa).
Takeaway. Before you sign a division plan or a contribution agreement, calculate two EBIT projections: one for continuing the existing model and one for the model after the change. That calculation determines whether you are entering the regime of § 16–18 of the Regulation.
The remuneration test: what was transferred, who would have paid for it, what the alternatives were
Proposition. Remuneration for a restructuring — in practice called an exit fee — is neither automatic nor excluded; it is the outcome of a three-part examination.
Statutory basis. Under § 16 of the TP Regulation, the comparability analysis takes into account "whether it was justified to introduce, and the amount of, the remuneration paid as part of the restructuring". Paragraph 17 arranges that examination into stages: identification of the commercial and financial relations before and after the restructuring, together with "an analysis of the options realistically available to the related entities"; determination of the tax consequences of the actual transactions; establishing whether and to what extent there has been a "transfer of the potential to generate profit"; and an assessment of whether the remuneration was justified. Paragraph 18 provides that, where a valuation technique based on future expected economic benefits is used, the functions, assets and categories of risk transferred are valued together.
The first element is an inventory: what actually changes hands. Fixed assets and inventories are the simplest. The harder part covers customer relationships, contracts, know-how, the team and the rights to carry on the particular activity. The second element is a counterfactual question: would an independent entrepreneur have given up such a package without payment? The third is the options realistically available to both parties, including continuing the model, exiting the relationship and renegotiating, together with the costs of each variant.
Practice. In an individual tax ruling of 26 March 2026, no. 0111-KDIB1-1.4010.623.2025.4.MF, the Director of the National Revenue Information Service (Dyrektor Krajowej Informacji Skarbowej, the Director of the KIS) assessed a transfer of the assets of a production plant to a company within the group, in which the exit fee was split into remuneration for tangible items and remuneration for the transfer of profit potential. The authority held that "the amount of the Exit fee which you will receive will for you be an accretion of a definitive, permanent and unconditional character", and rejected the spreading of the part relating to profit potential over settlement periods, because it is "a one-off, definitive and irreversible transaction".
Takeaway. Split the exit fee into its components in the agreement itself. Remuneration for tangible items, for rights and for the transfer of profit potential have different moments at which revenue and cost are recognised, and a single aggregate item makes each of them harder to defend.
Typical reorganisations and transfer pricing obligations
The second column answers the question about the definition in § 2(1), the third the question about the scope of the examination under § 16–18.
| Situation | Is it a restructuring within the meaning of the transfer pricing rules | Should remuneration be considered | Documentation | Legal basis |
|---|---|---|---|---|
| Centralisation of purchasing or sales functions | Yes, if the agreements change, functions pass and the EBIT threshold is met | Yes — examine the loss of margin, of customers and of decision-making power | Local file, FAR before and after, EBIT model, TPR | § 2(1) and § 16–17 of the TP Regulation; Articles 11c and 11k of the CIT Act |
| Transfer of production (machinery, inventories, nomination lists) | Yes, if the EBIT threshold is met | Yes — separately for tangible items and separately for profit potential | Local file, valuation, agreement splitting the consideration, TPR | § 17–18 of the TP Regulation; Article 12(3a) and Article 14(1) of the CIT Act |
| Transfer of customer relationships and of the contract base | Yes, where the relationships are the source of the profitability of the activity transferred | Yes — a typical subject of compensation between independent entities | Local file, analysis of the agreements and of the customers, valuation | § 17 of the TP Regulation; Article 11c(1) of the CIT Act |
| Conversion of a full-risk distributor into a limited-risk distributor | Yes, if risks and decision-making functions pass together with the change of agreements | Depends on the scope of the rights transferred; a fall in margin alone is not decisive | Local file, FAR before and after, comparison of the scenarios, TPR | § 2(1)(a) and (b) and § 16 of the TP Regulation |
| Transfer of intellectual property rights to a holding company | Yes, where the allocation of the DEMPE functions and the licence flows change | Yes — a valuation of the asset and a settlement covering functions, risks and the financing of development | Local file, DEMPE analysis, valuation, licence agreements, master file | Articles 11c–11d of the CIT Act; § 16–18 of the TP Regulation |
| Transfer of functions to a newly formed company following a division | It depends — what decides is the change in relations and the EBIT threshold, not the form of the transaction | It depends on whether profit potential passes along with the assets | Division plan and valuation consistent with the local file and with the TPR | Articles 529 and 529¹ of the CCC; § 2(1) of the TP Regulation; Article 11k of the CIT Act |
| Updating the price list for shared services without a transfer of functions | No — the second condition of the definition is not met | Not under this regime; the arm's length character is examined as for an ordinary service | Local file for the service transaction, if the threshold is exceeded | Article 11a(1)(6) and Article 11k(2)(2) of the CIT Act |
Documentation obligations, thresholds and time limits
Proposition. The documentation obligations follow from the thresholds and from the type of transaction, and not from whether the reorganisation was neutral for CIT purposes.
Statutory basis. The thresholds are set by Article 11k(2) of the CIT Act: PLN 10,000,000 for a goods transaction and for a financial transaction, and PLN 2,000,000 for a service transaction and for other transactions; for transactions with entities from territories applying harmful tax competition, Article 11k(2a) provides for PLN 2,500,000 and PLN 500,000. The local file is prepared in electronic form "by the end of the tenth month following the end of the tax year" (Article 11k(1)). Its elements, including the comparability analysis or the compliance analysis, are set out in Article 11q; paragraph 3a provides for a narrower scope for, among others, the listed transactions of micro-entrepreneurs and small entrepreneurs. The TPR information is filed "by the end of the eleventh month following the end of the tax year" (Article 11t(1)), and the master file by the end of the twelfth (Article 11p(1)).
The separate statement under Article 11m of the CIT Act is no longer filed — the provision has been repealed and the statement forms part of the TPR. Under Article 11t(2)(7), the information contains "a statement by the entity that the local transfer pricing documentation has been prepared in accordance with the actual state of affairs and that the transfer prices covered by that documentation are set on terms which unrelated entities would have agreed between themselves".
Practice. TPR information for tax years beginning after 31 December 2024 is governed by the regulations of the Minister of Finance and Economy of 27 November 2025 — Dz.U. z 2025 r. poz. 1744 dla CIT i poz. 1743 dla PIT (item 1744 for corporate income tax, item 1743 for personal income tax). The code for the predominant activity in accordance with the REGON register has become mandatory, the accounting standard is indicated in part of the financial data, and the names of the financial indicators and the margin calculation formulas have been changed. Where the functional profile changes during the year, the indicator reported in the TPR must correspond to the one examined in the arm's length analysis.
Takeaway. Build the timetable backwards: the TPR in the eleventh month forces the local file to be closed in the tenth, and that in turn requires the valuation and the comparability analysis to be ready earlier still.
The valuation and the evidence that has to be gathered before the transaction
Proposition. The documentation may be drawn up after the end of the year, but the evidence justifying the valuation cannot be reconstructed once the year has passed.
Statutory basis. Paragraph 17 of the TP Regulation requires an assessment of the options realistically available to the parties and of the extent of the transfer of profit potential — that is, of circumstances existing on the date of the decision. Article 11d(1) of the CIT Act lists five methods of verifying a transfer price, and paragraph 2 permits another method, including a valuation technique, where none of the five can be applied.
The minimum set of evidence comprises: a FAR analysis before and after the restructuring; two financial projections on uniform assumptions; a note on the analysis of the options realistically available; a valuation of the package of functions, assets and risks transferred, or a written justification for the absence of remuneration; an agreement separating out the individual elements of the consideration; and the resolutions and correspondence from the decision-making stage.
Practice. An individual tax ruling of the Director of the KIS of 24 April 2026, no. 0111-KDIB1-1.4010.67.2026.2.MF, shows the consequences of revisiting a valuation two years on. Since the amount followed from the agreement and the invoice and was charged to the result for 2023, "the aforementioned so-called exit fee remuneration was known to you and definitive, and therefore should have been classified as a tax-deductible cost in the year in which that cost was incurred, that is in 2023". The authority did not treat the later reduction of the exit fee as a transfer pricing adjustment, because the condition in Article 11e(2) of the CIT Act "relates to a change in circumstances established in the course of the tax year", whereas those circumstances occurred two years later.
Takeaway. A remuneration revision mechanism written into the agreement does not move the moment at which the cost is recognised. If the valuation is to be adjusted, prepare in advance a test of the conditions in Article 11e of the CIT Act — otherwise the adjustment will be accounted for under the general rules in Article 15(4i)–(4k).
What else a restructuring touches: an income adjustment, the GAAR, MDR, withholding tax, exit tax
Proposition. The same facts trigger several regimes; each has its own conditions and its own date.
Statutory basis and practice. Article 11c(1) of the CIT Act requires transfer prices to be set on arm's length terms, and paragraph 2 allows the authority to determine income or a loss without regard to the conditions arising from the connection between the parties. Recharacterising a transaction, or disregarding it, under Article 11c(4) requires it to be established that independent entities guided by economic rationality would not have entered into the transaction in question, or would have entered into a different one; under paragraph 5, difficulty in verifying the price cannot be the sole basis.
The anti-avoidance clause in Article 119a of the Tax Ordinance operates along a different axis — it examines a tax benefit contrary to the object or purpose of the statute where the manner of acting is artificial. An arm's length exit fee does not replace that assessment, and the absence of an economic justification for the reorganisation weighs on both tests at once.
The reporting of reportable arrangements (MDR) has a threshold of its own: the specific hallmark concerning the transfer of functions, risks or assets refers to the projected annual EBIT of the transferor being lower than 50% of the EBIT projected without the transfer — a different test from the 20% in the definition of a restructuring. From 1 October 2026 the structure of that hallmark changes by virtue of the Act of 29 May 2026 amending the Tax Ordinance and certain other acts; for events falling either side of those dates, apply the provisions appropriate to the moment at which the obligation arises.
Where payment is made abroad, check the list in Article 21(1) of the CIT Act: remuneration for profit potential alone does not appear in it, but if the price includes know-how, a licence or a right to a trade mark, part of the payment may be subject to withholding tax — which calls for the individual elements of the consideration to be separated out in the agreement and for a certificate of residence. Operating separately is the tax on income from unrealised gains on the transfer of assets outside the territory of Poland (Article 24f of the CIT Act, Article 30da of the Personal Income Tax Act (ustawa o podatku dochodowym od osób fizycznych, the PIT Act)).
Takeaway. Maintain a single financial model and a single functional description for all of these analyses. Divergent projections in the transfer pricing documentation, in the MDR note and in the valuation prepared for the purposes of the Commercial Companies Code are the easiest point of attack in a dispute.
When the obligations also apply to purely domestic transactions
Proposition. The domestic character of a reorganisation switches off neither the arm's length principle nor the reporting obligation.
Statutory basis. Article 11n(1) of the CIT Act exempts from the obligation to prepare a local file those controlled transactions concluded exclusively by related entities having their place of residence, registered office or management in Poland, provided that in the tax year none of them incurred a tax loss from the source to which the transaction relates, none benefits from the subjective exemption under Article 6 of the CIT Act, and none benefits from the exemption relating to activity in a special economic zone or under a support decision.
That exemption has three limitations. It concerns the local file alone — it does not disapply Article 11c of the CIT Act, so the arm's length character of the conditions remains subject to examination. Transactions covered by it are reported in the TPR information under Article 11t(1) of the CIT Act. And it is enough for one of the entities to incur a tax loss from the relevant source, or to operate under a support decision, for the exemption to fall away — and a restructuring is precisely the kind of event that generates a loss in the hands of the transferor.
Takeaway. Verify the conditions in Article 11n(1) of the CIT Act after the end of the year, on actual data. Until then, gather the material as though the exemption did not apply.
The most common mistake
The most common mistake is to carry out a division or a contribution in kind within a group without a separate transfer pricing analysis, on the assumption that, because the transaction is neutral for CIT purposes, there is nothing to establish. The reasoning is defective at the level of its legal bases: neutrality follows from the provisions on revenue and costs, whereas the arm's length obligation follows from Article 11c of the CIT Act and from § 16–18 of the TP Regulation. These are two independent regimes, and satisfying the first proves nothing under the second.
The consequences appear with a delay. An audit conducted two or three years after the reorganisation asks about the projections made on the date of the decision, about the alternatives considered, and about why the company giving up a profitable function did not demand payment. If the only documents are the division plan and the resolution, the answers have to be constructed from memory — while the authority already has the data on the actual results of both companies.
How to avoid this: attach to every reorganisation project a dated note answering three questions — whether commercial or financial relations change, whether functions, assets or categories of risk pass, and how the projected average annual EBIT changes. Where the answer is negative, the note is evidence that the test was carried out; where it is positive, it sets the valuation in motion before the resolutions are passed.
Summary
- Carry out the test under § 2(1) of the TP Regulation before the resolutions are passed: a material change in relations, a transfer of functions, assets or risks, and a change of at least 20% in the projected average annual EBIT over the three-year period.
- Prepare a FAR analysis before and after, and two financial projections on uniform assumptions; it is these, and not the book value, that are the starting point for valuing the remuneration.
- Split the exit fee in the agreement into remuneration for tangible items, for rights and for the transfer of profit potential — each component has its own moment at which revenue and cost are recognised.
- Set the timetable from the statutory time limits: the local file by the end of the tenth month (Article 11k(1) of the CIT Act), the TPR together with the statement by the end of the eleventh (Article 11t(1) and (2)(7)), the master file by the end of the twelfth (Article 11p(1)).
- Examine in parallel Article 11c(4), the clause in Article 119a of the Tax Ordinance, the MDR obligations, withholding tax and the tax on income from unrealised gains — on a single financial model and a single functional description.
Sources cited
All quotations from Polish-language sources — statutes, tax rulings and court judgments — are given here in the author's translation; the Polish wording is authoritative.
- Individual tax ruling of the Director of the National Revenue Information Service of 26 March 2026, no. 0111-KDIB1-1.4010.623.2025.4.MF — transfer of the assets of a production plant to a company within the group and the "Exit fee" remuneration; the separation of remuneration for tangible items from remuneration for the transfer of the potential to generate profit, and the moment at which revenue is recognised. https://eureka.mf.gov.pl/informacje/podglad/684523
- Individual tax ruling of the Director of the National Revenue Information Service of 24 April 2026, no. 0111-KDIB1-1.4010.67.2026.2.MF — the exit fee as a tax-deductible cost in the year in which it is incurred, and the assessment of a later reduction of the remuneration in the light of the conditions in Article 11e of the CIT Act. https://eureka.mf.gov.pl/informacje/podglad/688362
- Individual tax ruling of the Director of the National Revenue Information Service of 25 August 2025, no. 0111-KDIB1-2.4010.328.2025.1.END — holding: remuneration paid as part of a transaction intended to restructure business activity (an exit fee) constitutes a tax-deductible cost recognised on a one-off basis on the date it is incurred. The authority found the applicant's position to be correct and, under Article 14c § 1 of the Tax Ordinance, "refrained from giving the legal reasons for that assessment", which is why the authority's reasoning from that ruling has not been quoted. https://eureka.mf.gov.pl/informacje/podglad/655397
- Tax explanatory notes on transfer pricing of 31 March 2021 — no. 2: Transfer pricing adjustment within the meaning of Article 11e of the CIT Act (Article 23q of the PIT Act), Ministry of Finance. https://www.gov.pl/web/finanse/objasnienia-podatkowe-w-zakresie-cen-transferowych-z-31-marca-2021-r---nr-2-korekta-cen-transferowych-w-rozumieniu-art-11e-ustawy-o-cit-art-23q-ustawy-o-pit
- Recommendations of the Transfer Pricing Forum on the interpretation and scope of application of the provisions of Chapter 4 of the TP Regulation (Restructuring) of 3 March 2020 — a document prepared by the Minister of Finance's opinion-giving and advisory body; it does not constitute a tax ruling or tax explanatory notes within the meaning of the Tax Ordinance, and it gives none of the protection provided for tax explanatory notes.
- The Minister of Finance has not issued tax explanatory notes devoted to restructuring in transfer pricing. The list of tax explanatory notes published by the Ministry of Finance comprises, in the field of transfer pricing, six items: the explanatory notes of 14 June 2019 (technical aspects of preparing comparability analyses and compliance descriptions), nos. 2 and 3 of 31 March 2021 (transfer pricing adjustment, and the comparable uncontrolled price method), no. 4 of 1 December 2021, no. DCT4.8203.2.2021 (the transactional net margin method), no. 5 of 24 March 2023 (the resale price method) and no. 6 of 29 September 2023, no. DD12.8203.2.2022 (the cost plus method). There is no item in the list relating to restructuring, and since 29 September 2023 no new item in the field of transfer pricing has been added. That is why no restructuring explanatory notes have been cited in this article; in their place reference has been made to the Recommendations of the Transfer Pricing Forum of 3 March 2020, with the absence of any protective effect of that document noted.
E-book references
Selected restructuring topics are discussed at greater length in the e-book series Biblioteka Restrukturyzacji (Restructuring Library; Zbyszko Pora, JTWPOLAND): converting a sole trader into a sp. z o.o., the division of a company by spin-off or by separation, and the test for an organised part of an enterprise. The PDF files are available free of charge in the e-book section; the series is currently published in Polish.
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Get in touch →Legal basis: Act of 15 February 1992 on corporate income tax (Dz.U. z 2026 r. poz. 554, as amended), in particular Article 11a, Article 11c, Article 11d, Article 11e, Article 11k, Article 11l, Article 11n, Article 11o, Article 11p, Article 11q, Article 11r, Article 11t, Article 12(3a) and (3c), Article 14, Article 15(1) and (4d)–(4e) and (4i)–(4k), Article 21(1), Article 24f; Act of 26 July 1991 on personal income tax (Dz.U. z 2026 r. poz. 592, as amended), in particular Articles 23m–23zf and Article 30da; Regulation of the Minister of Finance of 21 December 2018 on transfer pricing for the purposes of corporate income tax (consolidated text: Dz.U. z 2023 r. poz. 1129), in particular § 2(1) and § 16–18; Regulation of the Minister of Finance of 21 December 2018 on transfer pricing for the purposes of personal income tax (consolidated text: Dz.U. z 2023 r. poz. 1349), in particular § 2(1) and § 16–18; Regulation of the Minister of Finance and Economy of 27 November 2025 amending the regulation on transfer pricing information for the purposes of corporate income tax (Dz.U. z 2025 r. poz. 1744); Regulation of the Minister of Finance and Economy of 27 November 2025 amending the regulation on transfer pricing information for the purposes of personal income tax (Dz.U. z 2025 r. poz. 1743); Act of 29 August 1997 — Tax Ordinance (Dz.U. z 2026 r. poz. 622, as amended), in particular Articles 14k–14n, Articles 86a–86o, Article 119a; Act of 29 May 2026 amending the Tax Ordinance and certain other acts (Dz.U. z 2026 r. poz. 846) — changes to the reporting of reportable arrangements from 1 October 2026; Act of 15 September 2000 — Commercial Companies Code (Dz.U. z 2024 r. poz. 18, as amended), in particular Article 529 and Article 529¹; Act of 16 October 2019 on the resolution of double taxation disputes and on the conclusion of advance pricing agreements (consolidated text: Dz.U. z 2023 r. poz. 948), in particular Article 81, Article 83 and Article 90