Does entering into a consortium agreement result in the creation of relationships (links) within the meaning of transfer pricing rules?

A consortium agreement is a flexible form of cooperation between entrepreneurs, consisting in the joint performance of a specific undertaking without creating a new legal entity. It is neither a commercial company nor a separate taxpayer—its parties remain independent business entities.

In the previous article, the consequences of entering into a consortium agreement by already related parties were discussed. However, another issue remains disputed:

can the mere conclusion of a consortium agreement lead to the creation of relationships within the meaning of transfer pricing regulations if the parties were not related entities before entering into it?

Of key importance here is the definition of related entities set out in Article 11a(1)(4) of the Polish Corporate Income Tax Act (CIT Act), in particular the premise of exerting a “significant influence” over another entity. This includes, among other things, holding at least 25% of shares, voting rights, or the right to participate in profits, as well as the actual ability to influence the making of key business decisions.

Position of the Director of the National Tax Information (KIS)

In an individual interpretation of 20 September 2023 (ref. 0114-KDIP2-2.4010.375.2023.1.RK), the Director of the National Tax Information (hereinafter: the DKIS) held that entering into a consortium agreement leads to the creation of capital relationships between its participants. Consequently, transactions carried out between the parties to the consortium should be treated as transactions between related entities and—after exceeding the statutory thresholds—may give rise to an obligation to prepare transfer pricing documentation.

At the same time, the authority indicated that the documentation obligation does not arise from the mere fact of entering into a consortium agreement, but only with respect to settlements performed between its participants.

It is worth noting that while stating that capital relationships arise at the moment of concluding the consortium agreement, the authority did not even attempt to explain what such relationships are supposed to mean and how they relate to the statutory premise of exerting “significant influence”.

In practice, this position amounted to a broad interpretation of the concept of relationships—equating a joint business undertaking with the creation of a relationship involving significant influence within the meaning of transfer pricing regulations.

Judgment of the Voivodship Administrative Court in Warsaw (WSA)

The authority’s position was appealed to the Voivodship Administrative Court in Warsaw, which challenged it in its judgment of 8 May 2024 (ref. III SA/Wa 2643/23).

The Court held that the mere conclusion of a consortium agreement does not automatically mean that relationships arise within the meaning of Article 11a(1)(4) of the CIT Act. In particular, there are no legal grounds to assume that cooperation in the implementation of a joint undertaking is equivalent to exerting “significant influence” of one entity over another.

The WSA emphasized that the definition of related entities is precise and cannot be interpreted expansively. Economic cooperation alone, even close cooperation, is not the same as a relationship of control or dominance.

Confirmation by the Supreme Administrative Court (NSA)

The WSA’s position was upheld by the Supreme Administrative Court in its judgment of 28 October 2025 (ref. II FSK 1164/24), which dismissed the tax authority’s cassation appeal.

The NSA noted that the authority had not demonstrated which elements of the described future event were to evidence the creation of “significant influence” between the parties. The reasoning indicated that the interpretation was limited to general statements and did not contain an in-depth analysis of the statutory prerequisites.

In practice, this means a clear rejection of any automatism in assuming relationships solely on the basis of concluding an agreement on the joint implementation of a project.

Although the current case law is favorable to taxpayers, the judgment concerns a specific factual scenario and does not rule out attempts by tax authorities to present a different approach in similar cases. It should be remembered that the content of the specific agreement is key in each instance. The manner of allocating risks and responsibility, decision-making mechanisms, or the structure of settlements between consortium members may be relevant for assessing whether, in a given case, “significant influence” is exercised.

From a practical perspective, it is recommended to analyze the above aspects even before entering into a consortium agreement, especially in the case of more complex cooperation structures or significant financial flows between the parties.

If you are considering entering into a consortium agreement or want to verify your transfer pricing obligations, it is worth securing your position by reviewing the agreement or applying for an individual interpretation.