THE HMRC has initiated a review of Organization for Economic Co-operation and
Development (OECD) rules on transfer pricing, following a recent OECD report on
Base Erosion and Profit Shifting. According to a new briefing from HM Revenue
and Customs, the organization has secured GBP 4.1bn of additional tax revenue by
demanding the transfer pricing arrangements of multinationals since the creation
of a dedicated Transfer Pricing Group in 2008. The OECD's consent on
international standard outlines the basis for the UK rules, and recent updates
have addressed how tax rules should apply when companies move their operations
to other countries and how much profit should be allocated to intangible assets
such as patents and trademarks.
HMRC approach will
ascertain that UK receives the tax revenue which is due simultaneously also
supporting UK businesses trading overseas. The briefing explains that it works
with other tax administrations to ensure that UK businesses trading
internationally are not subject to double taxation, and to agree on how much of
a business's profits should be taxed in the UK. HMRC also has an “Advance
Pricing Agreement programme”, through which the body works with businesses and
other tax administrations to agree the transfer prices of transactions in
advance.
|
