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Your gateway to global financial intelligence — featuring key developments in transfer pricing, tax law, and regulatory guidance.
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Direct Application of OECD Guidelines & Arm's Length Principle
UK transfer pricing, rooted in Part 4 TIOPA 2010, closely follows the 2022 OECD Guidelines. All cross-border transactions with connected parties must reflect prices negotiated as if between independent entities.
Court Decisions and Recent HMRC Practice
Recent UK tribunal and High Court cases reinforce OECD methodology and arm's length results as the UK standard. Courts and HMRC are increasingly penalizing undocumented or inconsistent transfer pricing, especially in high-value disputes.
Mandatory Master File and Local File
Since April 2023, UK entities in multinational groups with global revenues ≥€750 million must prepare Master and Local Files aligned with OECD standards and hold them contemporaneously with their tax returns. Applies to accounting periods from April 1, 2023.
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Tightened Documentation Deadlines & New Penalties
Documentation must be ready by the tax return filing deadline (12 months after period end). Penalties now apply for non-compliance or for lacking required documentation, regardless of correctness of transfer pricing position.
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Detailed Content Requirements for Files
Master and Local File content is prescribed in The Transfer Pricing Records Regulations 2023. The Local File must be in English and cover company structure, transaction details, comparables, and tax impact per HMRC guidance.
Country-by-Country Reporting & Public Disclosure
UK-headed groups meeting the €750 million threshold must file annual CbC reports to HMRC within 12 months post-year end. The UK is monitoring EU's public CbC regime and may require public disclosure in the future.
Response to Global Minimum Tax (Pillar 2)
The UK has legislated a 15% minimum tax for large multinational groups following OECD Pillar 2. The Multinational Top-up Tax began for periods after December 31, 2023, with deadlines and compliance aligned to international rules.
Guidance on Statistical Methods, Range, and Loss Markers
HMRC guidance (aligned to OECD) allows for arm's length ranges and interquartile ranges. Loss-making comparables and outliers may be excluded if reliability is improved.
Advanced Pricing Agreements (APA) Framework
HMRC offers APA programs (unilateral, bilateral, multilateral) providing certainty for future transfer pricing positions. The UK APA program follows OECD BEPS recommendations.
Focus Areas: Intangibles, Financial Transactions, and Hard-to-Value Assets
HMRC's recent focus is robust documentation and sound pricing of intangibles, cross-border financial transactions, and hard-to-value assets, mirroring OECD and UK-specific risks.
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