INTM468000 - Giving transfer pricing advice to taxpayers

Requests for advice on the operation of the transfer pricing rules

This guidance is not intended to cover:

• Treaty Clearances: claims by non residents to receive royalties or interest at the treaty rate of withholding tax or implementing the EU Interest and Royalties Directive [INTM400010 onwards]
• Financial Transfer Pricing issues: CTIAA Business International Transfer Pricing team continues to offer advice about the tax consequences of proposed financing arrangements [INTM540000 onwards]

Case Teams are sometimes approached by customers seeking advice or comfort about their arrangements for setting transfer prices, either before the transactions are entered into or before a tax return including the results of those transactions is made.

Where an approach is made, Case Teams should encourage and facilitate any discussions, assisted by expert advice from TPG colleagues, as this may offer a useful opportunity to learn about the business and to exchange views outside the usual enquiry framework. It should be emphasised that it is the customer’s responsibility to self-assess their tax liability, including their transfer pricing policy. The customer can be expected to know in detail about their pricing structure and where value is added within the group or business structure. The customer should use such knowledge and their commercial judgement to make arrangements and set prices which conform to the arm’s length standard. Case teams may be able to help this process by entering into these pre-return discussions. Useful pre-return discussions will lead to a valuable exchange of views and information and can therefore help to reduce the time taken by any subsequent enquiry or the possibility that an enquiry will be necessary.

Where the issue is the provision of services by one or more companies within a group, then it is possible that INTM464055 will cover the situation and customers may be referred to that guidance which should help them to self assess.

For any other queries or discussions, including a request for advice on the TP treatment of future transactions at the close of an enquiry into previous years, refer to the advice in INTM469020 on real-time working and APAs as this sets out how they should be handled.