This is the original version (as it was originally made). This item of legislation is currently only available in its original format.
(This note is not part of the Regulations)
These Regulations give effect to the record keeping requirements in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022.
These Regulations have effect for corporation tax purposes in relation to returns for accounting periods beginning on or after 1st April 2023 and for income tax purposes from the tax year 2024-25.
Regulation 2 defines a relevant person as a company, trustee or partnership who may be required to make and deliver a tax return. It also defines a relevant tax period as the tax period in respect of which the enterprise in relation to which the relevant person must make and deliver a return is part of an MNE Group which has a total consolidated group revenue of €750 million.
Regulation 3 defines controlled transaction for the purposes of the Regulations and the preparation of the Local File, by reference to the domestic implementation of the transfer pricing guidelines in Part 4 of the Taxation (International and Other Provisions) Act 2010, as transactions which involve two parties who are, in general, in some form of common control. Certain cases involving financing and transactions in oil are excluded.
Regulation 4(1) sets out the obligation that a relevant person must keep and preserve relevant transfer pricing records specified in regulation 5 that relate to the relevant period unless the exclusion in paragraph (2) applies. The exclusion applies where, if a relevant person was subject to the obligation, they would not have to include any information in the Local File about controlled transactions either because they do not have any or because any they do have fall under the exclusions in regulation 6.
Regulation 5 sets out what are specified transfer pricing records for the purposes of section 12B of the Taxes Management Act 1970 and paragraph 21 of Schedule 18 to the Finance Act 1998 and the form and manner in which the records must be kept. The specified transfer pricing records are the Master File and the Local File, which are described in the transfer pricing guidelines, and supplementary information relating to the preparation of the Local File specified in a notice published by the Commissioners for His Majesty’s Revenue and Customs.
Regulation 6 provides for information that does not have to be included in the Local File. This includes transactions where all parties are resident in the United Kingdom, with specified exceptions, and transactions which are the subject of advance pricing agreements made on or before 31st March 2023.
Paragraph 7 of Schedule 5 to the Finance (No. 2) Act 2023 provides that the Regulations may have effect in relation to such accounting periods or tax years beginning on or after 1st April 2023 as are specified in the regulations.
A paper copy of the OECD Transfer Pricing Guidelines 2022 is available for inspection at: His Majesty’s Revenue and Customs, 100 Parliament Street, London SW1A 2BQ. The OECD Transfer Pricing Guidelines 2022 are also available to review free of charge on the OECD website at https://www.oecd.org/tax/transfer-pricing/oecd-transfer-pricing-guidelines-for-multinational-enterprises-and-tax-administrations-20769717.htm.
A Tax Information and Impact Note covering this instrument was published on 15 March 2023 alongside the Spring Finance Bill 2023 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.
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