Poland: 2012 Polish pharmaceutical sector regulations may impact transfer pricing documentation

Tax Insights ()

During 2012 a new pharmaceutical reimbursement law was introduced in Poland (amended in mid-2012). It impacts profitability of distributors of pharmaceutical products. However, ambiguity in the new law has resulted in companies applying different business models. To date, the Polish tax authorities have provided only limited assurance that the new law overrides TP regulations.

Consequently, in preparing their FY2012 TP documentation, Polish distributors should take into account both the transfer pricing and the reimbursement regulations because complying with the new reimbursement law may lead to results below an arm’s length level. It is also essential that due consideration is given to the description of transactions in the TP documentation, to ensure that this does not to create risk from the regulatory perspective.