UK Transfer Pricing Policy

E-mail: lon4ww@evershinecpa.com
Ms. Anny Lin, speak both English and Chinese.
WeChat: annylin8008
Skype: annylin8008

TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?

TP-A-10
When the United Kingdom Tax entity would like to pay out whatever business profits, Royalty, Technical Services fees, Interests, trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the United Kingdom Treaty Page.
But if want to verify the above-mentioned amount is reasonable, will adopt the United Kingdom TP Policy.

TP-Q-20:   
在英國甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?
What are the scenarios in the United Kingdom, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:
The exemption applies to SME if the transactions are between a UK taxpayer and a related party in a qualifying territory. Exemption criteria are as follows: –

1. Groups with less than 50 employees, turnover or gross assets not exceeding Euro 10 million.
2. Groups with less than 250 employees, turnover not exceeding Euro 50 million or gross assets of less than Euro 43 million.

TP-Q-30:  
在英國甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?
What are the scenarios in the United Kingdom, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration to the country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:
There are proposed changes by HMRC to implement the compliance on submission of International Dealings Schedule (IDS) by all taxpayers.

TP-Q-40:  
在英國甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?
What are the scenarios in the United Kingdom, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:
There are proposed changes by HMRC to implement the compliance on submission of International Dealings Schedule (IDS) by all taxpayers.
There is no mandatory requirement to prepare Local and Master File for HMRC.
However, CbC Report are required for UPE with consolidated UPC’s revenue of > Euro 750 million in the preceding fiscal year.

United Kingdom TRANSFER PRICING for professionals

Overview

United Kingdom accepts the OECD transfer pricing documentation model.
The UK adopts an arm’s-length regime for intragroup trading, including domestic transactions, although domestic rules apply only to large companies.

Related Party

The test to determine if parties are connected persons is by looking at “Participation in the management, control or capital”. Entities within a corporate group with >50% shareholdings relationships are related to each other.

Transfer Pricing method

All transfer pricing methods outlined in the OECD guidelines may be accepted.
Below is the acceptable TP method.

1. Comparable Uncontrolled Price (CUP)
2. Resale price
3. Cost-plus
4. Transactional profit split
5. Transactional net margin

Transfer Pricing documentation

The UK does not currently have prescriptive requirements for transfer pricing documentation.
However, businesses that are subject to the transfer pricing rules (SMEs excluded) are required to maintain transfer pricing documentation.

Due dates and respective threshold:

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

London Evershine BPO Service Limited Corp.
E-mail: lon4ww@evershinecpa.com
Ms. Anny Lin， in both English and Chinese.
WeChat: annylin8008
Skype: annylin8008

For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4lon@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
Email address: dalechen@evershinecpa.com
Linkedin address: Dale Chen

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(version: 2024/07)

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