Transfer Pricing

(asked on 16th November 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what penalties apply to multinational companies that fail to submit required transfer pricing information within the deadline set by HMRC.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 19th November 2020

The filing of transfer pricing documentation alongside the tax return is not currently compulsory in the UK.

Taxpayers should prepare and retain such transfer pricing documentation as is reasonable given the nature, size and complexity of their business or of the relevant transaction but which adequately demonstrates that their transfer pricing meets the arm’s length standard. HMRC’s aim is to address this issue effectively while ensuring that businesses do not suffer disproportionate compliance costs.

In the event of a compliance check by HMRC, if the business has not provided all the documents and information requested, HMRC have the power to issue a notice to the business requiring it to provide information and documents that HMRC reasonably require for the purpose of checking its tax position.

If the business does not provide the information or produce the documents requested, HMRC may charge a penalty unless there is a reasonable excuse for the failure.

If the failure continues, HMRC may charge daily penalties. If HMRC consider that the maximum daily penalties that can be assessed are insufficient for the particular case or the that records have been destroyed, a tax-related penalty may be appropriate.

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