UK and International Tax news
Draft Transfer Pricing Regulations
Thursday 12th January 2023
HMRC have recently published draft regulations governing transfer pricing documentation for consultation.
Following a previous consultation on updating transfer pricing documentation in March 2021, HMRC’s response was published in November 2021 together with the announcement that consultation on draft legislation would take place in 2022.
The draft regulations require MNEs with turnover of €750m or more, operating in the UK, to keep and preserve a master file and local file in accordance with the OECD Transfer Pricing Guidelines.
The regulations also provide HMRC with the power to introduce, by way of a published notice, the requirement for MNEs to produce a Summary Audit Trail (SAT). This document covers the steps taken by members of an in-scope MNE in completing their local file.
HMRC has confirmed that it will undertake a separate public consultation on the SAT in 2023. A decision on the SAT’s commencement will be made following the conclusion of the public consultation.
The regulations have effect for corporation tax purposes, in relation to accounting periods beginning on or after 1 April 2023, and for income tax purposes, in relation to the tax year 2024 to 2025 and subsequent years.
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