The impact of CIT grouping on transfer pricing issues in VAT

Abstract

Under the Polish Corporate Income Tax Act (hereinafter ‘CIT Act’ or ‘CITA’), transfer pricing restrictions are not applicable to transactions within a tax capital group. The question is whether the establishment of a CIT group eliminates the possibility of objective valuation for VAT purposes. According to the judgments below, objective valuation for VAT is not applicable within a CIT group. The judgments create new VAT tax planning opportunities for related companies with different right to deduct input VAT.