United Kingdom

The UK transfer pricing legislation, which can be found in the Taxation (International and Other Provisions) Act 2010 (“TIOPA 2010”), Part 4, requires that any provision made by a transaction (or series of transactions) between connected persons be made on an arm’s length basis, as would have been made between independent enterprises. The legislation does not directly stipulate how the arm’s length provision should be established and instead requires that it “be read in such manner as best secures consistency” with the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“OECD Guidelines”) and the OECD Model Tax Convention on Income and on Capital, as covered in other chapters. At the time of writing, the 2017 version of the OECD Guidelines, published by the OECD on July 10, 2017, should be used for interpreting UK transfer pricing (“TP”) laws. This includes the approach to the transfer pricing of hard-to-value intangibles (“HTVI”) that is contained in the OECD Transfer Pricing Guidelines, Chapter VI Section D.4.