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HMRC internal manual

International Manual

HM Revenue & Customs
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Transfer Pricing: Operational guidance: giving transfer pricing advice to customers

Requests for advice on the operation of the transfer pricing rules

This guidance is not intended to cover treaty clearances, which are claims by non residents to receive royalties or interest at the treaty rate of withholding tax or implementing the EU Interest and Royalties Directive (see INTM400010 onwards)

Case teams are sometimes approached by businesses seeking advice or comfort about their arrangements for setting transfer prices, either before the transactions are entered into or before a tax return including the results of those transactions is made.

Where an approach is made, case teams should encourage and facilitate any discussions, assisted by expert advice from Transfer Pricing Group colleagues, as this may offer a useful opportunity to learn about the business and to exchange views in real-time outside of the usual enquiry framework. It should be emphasised that it is the business’ responsibility to self-assess its tax liability. This includes its transfer pricing policy. The business can be expected to know in detail about its pricing structure and where value is added within its group or business structure. The business should use such knowledge and its commercial judgement to make arrangements and set prices which conform to the arm’s length standard. Case teams, with input from TPG staff, may be able to help this process by entering into these pre-return discussions. Useful pre-return discussions will lead to a valuable exchange of views and information and can therefore help to reduce the time taken by any subsequent enquiry or the possibility that an enquiry will be necessary.

Where the issue is the provision of services by one or more companies within a group, then it is possible that INTM440090 will cover the situation and taxpayers may be referred to that guidance which should help them to self assess.

For any other queries or discussions, including a request for advice on the TP treatment of future transactions at the close of an enquiry into previous years, refer to the advice in INTM480540 on real-time working and APAs, and in INTM480550 on Advance Thin Capitalisation Agreements, where it is set out how they should be handled.