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UK Transfer Pricing legislation provides that it is to be interpreted “in such manner as best secures consistency" with a specific version of the OECD Guidelines. Until now this was the 2010 version as amended by the OECD’s final Base Erosion and Profit-Shifting (BEPS) Report of October 2015.

In July 2017 the “Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations” (the ‘2017 OECD Guidelines’) were published to include the recommendations of the BEPS project. Subsequently the TIOPA 2010 Transfer Pricing Guidelines Designation Order 2018 was made on 28 February 2018. The Order updates the definition of “the transfer pricing guidelines” to the 2017 OECD Guidelines.

By Treasury Order the definition of "the transfer pricing guidelines" in UK legislation has been updated to the 2017 OECD Guidelines and will apply:

  1. for corporation tax purposes, for accounting periods beginning on or after 1 April 2018; and
  2. for income tax purposes, for tax year 2018-19 and subsequent tax years.

In most cases the practical impact of this change will be limited because the provisions of the final BEPS Report were incorporated into the 2010 version of the Guidelines with effect from April 2016.