On 21 December 2022 the UK issued for consultation the draft regulations on Transfer Pricing Documentation, inviting comments from interested parties by 31 January 2023.
The draft statutory instrument would require multinationals operating in the UK with turnover of EUR 750 million or more to keep a master file and local file in line with the OECD Transfer Pricing Guidelines. The regulations would take effect for corporation tax purposes for accounting periods beginning on or after 1 April 2023; and for income tax purposes, from the tax year 2024/25 onward.
Summary audit trail
HMRC are empowered by the draft regulations to publish a notice introducing a requirement for multinationals to prepare a Summary Audit Trail (SAT). This would set out the steps in the procedure carried out by the multinational to prepare and complete its local file.
A separate public consultation is to be launched on the SAT during 2023 and the provision for the SAT would therefore be introduced at a later date after the public consultation is completed and the comments have been taken into account.
