Transfer Pricing Controversy

HMRC recently released its 2016/17 statistics in relation to transfer pricing and diverted profits tax. In the years from 2011/12 to 2016/17, HMRC secured £5.914 billion of additional tax by challenging the transfer pricing arrangements of multinationals. DPT was first applied in 15/16.

HMRC has published a new Statement of Practice about the use of MAP - the process by which a tax resident from one country can ask their tax authority to enter into discussions with their counterpart if they believe they are not being taxed in accordance with the relevant double tax treaty.

The future for multinational group includes increased disclosure, complexity and controversy therefore APAs are increasingly attractive, but the global tax environment is changing and has implications for taxpayers and tax authorities.