The Taxation (International and Other Provisions) Act 2010 Transfer Pricing Guidelines Designation Order 2018

EXPLANATORY NOTE

(This note is not part of the Order)

UK transfer pricing rules are based on the internationally agreed arm’s length principle. Guidance on applying the arm’s length principle is set out in the Organisation for Economic Co-operation and Development (OECD) transfer pricing guidelines, which are referred to in UK transfer pricing legislation.

On 10th July 2017 the OECD published a new version of its transfer pricing guidelines.

The Order updates the definition of ‘the transfer pricing guidelines’ in the UK’s legislation by designating the new 2017 version in place of the version referred to in section 164(4)(a) of the Taxation (International and Other Provisions) Act 2010.

This UK transfer pricing rules operate by comparing the actual provision made or imposed as between two persons with the arm’s length provision which would have been made as between independent parties (section 147 of the Taxation (International and Other Provisions) Act 2010).

This Order has effect in relation to provision made or imposed at any time—

(a) for corporation tax purposes, for accounting periods beginning on or after 1st April 2018, and

(b) for income tax purposes, for the tax year 2018-19 and subsequent tax years.

A copy of the OECD Transfer Pricing Guidelines 2017 is held in the British Library collection and is available for inspection free of charge in the library’s reading rooms to registered readers. Registration for a reader pass is also free of charge. Further information can be found on the British Library website at https://www.bl.uk/visit/reading-rooms.

The OECD Transfer Pricing Guidelines 2017 are also available to review free of charge on the OECD website at http://www.oecd-ilibrary.org/taxation/oecd-transfer-pricing-guidelines-for-multinational-enterprises-and-tax-administrations-2017_tpg-2017-en.”.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.