United Kingdom Tax Agency Issues Policy Paper on Transfer Pricing Reform, Other Amendments

The United Kingdom HM Revenue and Customs Nov. 26 issued a policy paper on a proposal to reform the transfer pricing, permanent establishment (PE), and diverted profits tax laws. The proposal includes measures to: 1) simplify transfer pricing rules regarding the participation condition, intangibles, U.K.-to-U.K. transfer pricing, and interpretation in accordance with OECD principles; 2) align PE rules with international consensus regarding the PE definition and profit allocations to PEs; 3) provide U.K.-resident companies relief for transfer pricing adjustments to an affiliated nonresident company regarding a U.K. PE; 4) introduce a charging provision for unassessed transfer pricing profits within corporation ...