Transfer of goods between the headquarters and a foreign branch

The Director of the National Tax Information Office in his individual interpretation of June 25, 2026, file reference 0111-KDIB1-2.4010.231.2026.1.EJ, referred to documentation obligations in transfer prices in the event of the transfer of goods between a Polish company and its foreign branch.

The authority found the taxpayer’s position to be correct.

What was the case about?

The case concerned a Polish company that planned to expand its operations on the Spanish market by establishing a foreign branch in Spain.

The branch was to sell the company’s products. It was intended to have its own technical facilities, including an office, warehouse, and local sales and administrative staff.

The company planned to move goods from Poland to Spain, i.e., between its Polish headquarters and its Spanish branch. For VAT purposes, such a transfer of the taxpayer’s own goods to another EU Member State could be classified as an intra-Community supply of goods and documented with a 0% VAT invoice. However, the company emphasized that any flows of goods or funds between the company and the branch would be internal in nature.

What was the taxpayer’s question and position?

The company asked whether it was obliged to prepare transfer pricing documentation for asset transfers, i.e. the movement of goods between the Polish company and its Spanish branch.

The company argued that such an obligation does not arise. It argued that a branch is not a separate tax entity, but merely an organizationally and financially distinct part of the same company. Consequently, transfers of assets between the headquarters and the branch occur within a single economic entity.

What did the Director of KIS confirm?

The Director of the National Tax Information Office confirmed that the company is not obliged to prepare transfer pricing documentation solely for asset transfers between the Polish company and its Spanish branch.

Why is this important?

In the case of a taxpayer-foreign permanent establishment relationship, transfer pricing regulations do not apply separately to each internal transaction, such as the transfer of goods, funds, or costs. A controlled transaction in this case is the attribution of income or loss to the foreign permanent establishment, and the value of the attributed income or costs is crucial.

This means that for documentation purposes, individual activities/transactions should not be looked at individually.

The interpretation is important for companies that develop foreign operations through branches and, as part of these operations, among other things, move goods between the headquarters and a foreign plant.

The movement of goods itself may require appropriate settlement under other taxes, but does not automatically imply the obligation to prepare local transfer pricing documentation for the goods transaction.

As mentioned above, this does not mean, however, that cooperation with a foreign branch remains outside the scope of transfer pricing.

What does this mean in practice?

The interpretation does not provide new or groundbreaking information, but rather confirms what results from transfer pricing regulations.

It’s worth remembering, however, that these types of transactions are “special” in nature. This is especially true given that the taxpayer and its foreign establishment are treated as related entities under transfer pricing regulations, a legal fiction that entrepreneurs often forget about.