UK Joins Global Trend in Transfer Pricing Reporting Compliance

The UK’s announcement of its International Controlled Transactions Schedule, or ICTS, effective for accounting periods beginning Jan. 1, 2027, is part of a long-standing trend. The UK is now officially one of the last major world economies to have adopted requirements for annual transfer pricing data reporting.

While the OECD’s three-tier documentation framework—master file, local file, and country-by-country reporting—remains the international standard, an ever-growing number of jurisdictions have layered additional annual disclosure requirements on top—the “fourth tier.” This fragmentation is creating a compliance burden that multinationals must now grapple with.

As the UK prepares for its Spring 2026 technical consultation on ICTS design, multinationals should anticipate continued divergence in national requirements, in the absence of a major initiative from the Organization for Economic Cooperation and Development. Transfer pricing compliance teams must now maintain expertise not only in the core three-tier OECD framework but also must be able to navigate jurisdiction-specific annual disclosure obligations with varying thresholds, formats, and submission deadlines.

Proactive Disclosure Trend

The UK’s ICTS represents a departure from the traditional reactive “prepare and defend” model, where all supporting information relating to intercompany transactions is maintained by the taxpayer but only submitted to tax authorities on request. Instead, the UK will require proactive annual filing of cross-border related party transaction data directly to the UK tax authority, likely alongside corporate tax returns due in 2028.

This aligns the UK with a large number of jurisdictions that have already implemented similar regimes, transforming transfer pricing compliance from mostly reactive documentation to proactive annual reporting.

Germany’s implementation of its transaction matrix requirement, effective Jan. 1, 2025, is the most recent example of another major holdout jurisdiction hopping on the same bandwagon. German taxpayers must now prepare a structured overview of intercompany transactions as part of their annual transfer pricing documentation. And although the disclosure does not need to be filed proactively, there is only a short 30-day deadline to present it on request.

The transaction matrix provides tax authorities with information on the nature, volume, and economic background of intercompany transactions.

Long before Germany, and now the UK, many other major economies decided that gathering granular transfer pricing data from taxpayers on an annual basis was the way to go. The list is long, though we can honorably mention a few heavyweights. Australia demands a particularly detailed international dealings schedule every year. Japan requires schedule 17-4 along with a corporate tax return for any taxpayer with foreign intercompany transactions.

In India, the bar is even higher, requiring an accountant’s certificate (Form 3CEB) to validate international dealings.

France (Form 2257-SD) and Spain (Form 232) require broadly similar levels of granularity of transfer pricing data as Germany does via its respective disclosures that have to be filed proactively with tax authorities.

Last but not least, consider the US: Although less focused on granular data than others, it also requires annual reporting of various foreign related-party data via Forms 5471, 5472, and 8865.

The Remaining Holdouts

Among OECD members, countries that adhere only to the OECD three-tier documentation standard are a dying breed.

Among G7 economies, after the UK’s upcoming adoption, only Italy will not mandate preparation or filing of any specific transfer pricing disclosure, though one could argue that it compensates for the “missing fourth tier” with an exceptionally rigid local file format—its documentazione nazionale.

The remaining group of OECD member countries that do not yet mandate preparation of any specific transfer pricing disclosures largely comprises jurisdictions that position themselves as open, investor-friendly places, such as Ireland, Luxembourg, the Netherlands, and Switzerland.

Case for Standardization

The proliferation of country-specific reporting formats creates an increasing compliance burden for multinationals. No two disclosures are the same—each one has its own format and structure, requiring different data points and granularity. Some of the disclosures are filed together with a corporate tax return, some have their own deadlines, others need to be maintained and provided only on request.

To make things even worse, some countries change these forms quite regularly. At one point, Poland used to revise its TPR-C form almost every year (since its introduction in 2019, we are up to version five and counting). Belgium updated its Forms 275.LF and 275.MF last year, only to pull a last minute about-face, shelving some of the expected changes through a Royal Decree issued last December.

A standardized OECD reporting format could constitute a fourth tier in the transfer pricing documentation package, complementing the existing three-tier structure established under BEPS Action 13. Such standardization would reduce compliance costs for multinationals operating across multiple jurisdictions, ensure consistency in captured data, and facilitate more efficient tax authority cooperation through automated information exchange mechanisms.

The OECD already demonstrated its capacity for global coordination with country-by-country reporting, which has been successfully implemented by more than 100 countries. A similar approach to transaction-level disclosure could harmonize the current fragmented landscape while meeting the risk assessment objectives that drive national disclosure requirements.

The question is no longer whether additional disclosure requirements will become the norm—they already have—but whether the international community will coordinate to standardize them before the compliance burden becomes unmanageable.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

David Zarecky is a transfer pricing adviser and co-founder of Reptune Tax in Amsterdam.

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