HMRC consults on transfer pricing record-keeping regulations

HMRC is consulting on draft Transfer Pricing Records Regulations 2023 which will give effect to the record-keeping requirements in the OECD transfer pricing guidelines for multinational enterprises and tax administrations 2022. The consultation closes on 31 January 2023.

In a client briefing, KPMG observed: ‘The draft rules are largely as expected insofar as they apply to MNEs with turnover of €750m or more and which have taxable operations in the UK, and require the preparation of an OECD-standard master file and UK local file for each taxable person for accounting periods commencing on or after 1 April 2023. There are two important developments to note. Firstly, the proposal for an accompanying summary audit trail (SAT) will now be delayed pending a public consultation in 2023. Secondly, the draft regulations exclude UK-UK transactions unless one of the parties has elected into the patent box or is carrying on a ring fence trade.’

The regulations are expected to have effect for accounting periods beginning on or after 1 April 2023 (corporation tax) and from 2024/25 (income tax).