Comparability Factors

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Most countries’ Transfer Pricing rules are based on the “arm’s length principle”, as defined by the Organisation for Economic Co-operation and Development (OECD).

The concept of “comparables” and their importance to the arm’s length principle was introduced in my previous Note in this category.

This Note looks at the five factors which the OECD Guidelines suggest be considered in a comparability analysis. Read the rest of this entry »


Diverted Profits Tax

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The UK Government announced in its 2014 Autumn Statement that it was introducing a new tax, the Diverted Profits Tax (DPT).

DPT is aimed at multinational enterprises (MNEs) that use contrived arrangements to bypass UK rules on Permanent Establishment (PE) and Transfer Pricing (TP) and so divert profits from the UK. Read the rest of this entry »

The Arm’s Length Principle

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This Note looks at the arm’s length principle in Transfer Pricing and introduces the concept of “comparables”.

“Comparables” basically means using comparable transactions to the connected-party transaction being reviewed, but between independent unconnected businesses. Such comparables are used to fix an arm’s length indicator, e.g. price or margin etc. (or the arm’s length range for a particular indicator). Comparables will be discussed further in my next Note. Read the rest of this entry »

The Basic Transfer Pricing Rule

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This Website is all about Transfer Pricing from a UK taxation perspective. Its aim is to inform and educate.

Over the coming months I’ll cover basic Transfer Pricing principles and take a more detailed look at UK specific Transfer Pricing rules and topical UK Transfer Pricing issues as they arise. Each Note will be around 1500 words, so not too taxing. Read the rest of this entry »