Transfer Pricing Audits as a Tool for Protecting State Budget Revenues – Expert Commentary
14.05.2026
Transfer pricing remains one of the key focus areas of the Polish National Revenue Administration (KAS) in corporate income tax (CIT) audits. The activities undertaken by tax authorities are aimed at verifying whether transactions carried out between related entities are conducted on arm’s length terms and whether they do not lead to unjustified profit shifting within capital groups.
During audits, the authorities analyze in particular: transfer pricing documentation, the functions, risks and assets of each party to the transaction, as well as the comparability of the applied terms with market data. If irregularities are identified, the tax authorities are entitled to adjust the taxpayer’s income and assess additional tax liabilities, which in practice often results in significant corrections to CIT settlements.
KAS Audit in an Automotive Industry Company
A case published at the end of March 2026 on the website of the Polish Ministry of Finance – National Revenue Administration, concerning an audit conducted by the First Silesian Tax Office in Sosnowiec, illustrates the current approach of the tax authorities to transfer pricing matters. An automotive sector company was selected for verification based on risk analyses indicating potential irregularities in the settlement of corporate income tax for 2024.
Even before the formal initiation of the audit, after receiving a notification of the intended inspection, the taxpayer corrected its CIT return and paid PLN 9.5 million in overdue tax. However, this action did not close the matter. Based on prior analytical findings, the tax authority decided to continue the audit in the area of transfer pricing.
During the audit activities, additional irregularities related to transactions between related parties were identified, resulting in a further understatement of the tax base. Consequently, the company was required to pay an additional PLN 1.5 million. The taxpayer accepted the audit findings, submitted another correction to the tax return, and settled the liabilities. The total amount transferred to the state budget amounted to nearly PLN 11 million.
Expert Commentary
This case confirms that transfer pricing is treated by the tax administration as an area of elevated tax risk, and that an earlier correction of a tax return does not necessarily prevent further verification by the authorities. For taxpayers, this means not only the need to formally comply with documentation obligations, but also to ensure that intra-group settlements genuinely reflect market conditions.
Transfer pricing regulations are intended to protect the domestic tax base and prevent the shifting of profits to jurisdictions with lower taxation levels. Tax authorities consistently apply the principle that profits should be taxed where they are actually generated. KAS audit practice demonstrates that this area will continue to attract intensive scrutiny from the tax authorities, particularly with respect to large entities operating within international capital groups.
