The tax authority found that P.sp. z o.o. had understated its income from sales to related parties in the P. Group. The tax authority selected three comparable independent wholesalers and established a range of profit margins between 4.02% and 6.24%. As P. sp. z o.o. had a profit margin of only 2.84% on its wholesale activities, an adjustment was made to the taxable income. A complaint was filed by “P. sp. z o.o.” with the Administrative Court, which was dismissed, and an appeal was then filed with the Supreme Administrative Court. Judgement of the Supreme Administrative Court. The the Supreme Administrative Court, annulled the appealed decision in its entirety and ordered – when re-examining the case – the tax authority to follow the interpretation of the law made by the Supreme Administrative Court. In a very comprehensive judgment, the Court ruled on a wide range of issues, including Whether and how to take into account income received for other activities (marketing services) when determining the arm’s length income. The choice and application of transfer pricing methods The objectives and standards of a compability analysis and benchmarking study conducted by the tax authority The use of statistical methods (IQR) when the number of comparables in a benchmark is limited. Click here for English translation Click here for other translation ...