The thrust of HMRC’s guidance is to reject the notion that a profit split shouldn’t be used to reward risk control contributions, write Phil Roper and Charles Havisham (KPMG).
On 26 January 2024 HMRC published new transfer pricing guidance (in their International Manual at INTM485025) on how risk allocation should be analysed when delineating controlled transactions and the consequences for pricing transactions in accordance with the arm’s length principle. HMRC’s guidance sets out its views on a number of contentious interpretative issues pertaining to the OECD Transfer Pricing Guidelines (TPG).
Background to risk control framework
The BEPS 2015 Final Report on Actions 8–10 made important changes to the TPG including the introduction of a new six-step framework for analysing risk assumed in a controlled transaction in order to delineate the actual transaction – essentially involving identifying its actual characteristics and true terms. The objective was to ensure that inappropriate returns...
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The thrust of HMRC’s guidance is to reject the notion that a profit split shouldn’t be used to reward risk control contributions, write Phil Roper and Charles Havisham (KPMG).
On 26 January 2024 HMRC published new transfer pricing guidance (in their International Manual at INTM485025) on how risk allocation should be analysed when delineating controlled transactions and the consequences for pricing transactions in accordance with the arm’s length principle. HMRC’s guidance sets out its views on a number of contentious interpretative issues pertaining to the OECD Transfer Pricing Guidelines (TPG).
Background to risk control framework
The BEPS 2015 Final Report on Actions 8–10 made important changes to the TPG including the introduction of a new six-step framework for analysing risk assumed in a controlled transaction in order to delineate the actual transaction – essentially involving identifying its actual characteristics and true terms. The objective was to ensure that inappropriate returns...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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