Transfer pricing
Unlocking value through strategic transfer pricing.
International trade is constantly evolving and local taxing authorities are continuing to look at ways to ensure that multinational enterprises are paying the right amount of tax and that profits are taxed where value is created.
Our team of specialists combine technical knowledge with practical insights to help you navigate the complexities of the transfer pricing regulations.
We understand that transfer pricing is not just about compliance; it is about optimising value across your UK and global operations.
The UK has had a transfer pricing regime for many years, although small and medium enterprises (SMEs) have largely been exempt from the need to consider transfer pricing. From 1 April 2019, this all changed for SMEs in the UK, with the introduction of the anti-profit fragmentation legislation.
The exemption does not apply to transactions with related parties in territories with which the UK does not have a double taxation treaty with an appropriate non-discrimination article.
Where an exemption does not apply the UK’s transfer pricing requirements are:
Intra-group legal agreements should be in place for all transactions and be consistent with the group’s transfer pricing policies.
A transfer pricing policy memo alongside a benchmarking and functional analysis should be prepared.
Depending on the group size, transfer pricing documentation should be prepared following the OECD guidelines.
For transfer pricing, what constitutes a small or medium group?
Small: applies to groups with fewer than 50 employees AND less than 10 million euros turnover OR less than 10 million euros in assets.
Medium: applies to groups with fewer than 250 employees AND less than 50 million euros turnover OR less than 43 million euros in assets.
For transfer pricing, what constitutes a large group?
This is a group with greater than 250 employees OR less than 250 but with both greater then 50 million euros turnover and greater than 43 million euros in assets.
For much larger groups, whose turnover exceeds 750 million euros, there are additional requirements in the form of needing to file or retain the following documents.
- Country-by-country Report (CbCR): annual filing.
- Master file (MF): retain in a format specified by OECD regulations.
- Local file (LF): retain in a format specified by OECD regulations.
- Summary audit trail: when the legislation gets introduced.
Learn more about this definition from our insight HMRC Country-by-Country notification requirements.
How we can help includes:
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Large or Listed Companies
Obligations for companies that are listed or deemed large can differ from standard sized organisations.
Explore our related tax services
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We are here to help improve your transfer pricing processes; we offer pragmatic advice with workable solutions that add value to your company.
As part of the Crowe Global network, we collaborate with experts in over 130 countries, and can offer support on regulatory and tax issues in different jurisdictions.
