By 2023, His Majesty’s Revenue and Customs announced that the United Kingdom will enact new Transfer Pricing Regulations addressed to multinationals. These new tax rules will increase control over large multinational companies by strengthening accounting requirements from April.
1. Master File and Local Report
Although it is in process, the new law would affect those multinationals with transactions in the United Kingdom and with a turnover exceeding € 750 million or more.
In this regard, such companies will be required to maintain the Master File and the Local Report on transactions, according to the OECD Guidelines and the Arm’s Length Principle, i.e., the related party transactions must be entered into as unrelated companies would do in similar circumstances.
2. Maintenance of Documentation
Likewise, the obligation to maintain documentation on Transfer Pricing transactions will be included, as long as the requirement of being multinational companies with revenues exceeding € 750 million is complied with.
3. When will these be effective?
These rules will apply to Corporate Income Tax for returns corresponding to accounting years beginning on April 1, 2023. In addition, it will affect Income Tax as of fiscal years 2024- 2025.
This new legislation is based on the information requirements determined by the OECD on Transfer Pricing for multinational companies and tax administrations in 2022.
Source: Expansión.com 01/11/23