UK first country to introduce additional OECD transfer pricing requirements
The UK is the first country in the world that will adopt the much stricter transfer pricing requirements that are currently designed within the OECD (Organization of Economic Cooperation and Development)
The measures will most likely be introduced in 2016 and will result in much more transparency and information to tax authorities, since multinational companies with corporate headquarters in the UK need to share each year:
- The amount of revenue and profit and corporate tax that is paid in each country
- Overview of the business set up in each country (employees, tangible assets)
- Overview of the business activities in each country
Although the OECD discussion with respect to ‘country by country’ reporting is not finished, it is anticipated that many countries will follow. Due to the various exchange of information agreements between countries, it is expected that the reported information will be shared amongst the various tax authorities. This may trigger additional tax audits.
Given the strong international focus of tax authorities to prevent abuse and artificial profit shifting, we recommend to review your transfer pricing framework and check whether it is in line with the framework developed within the OECD.back to overview