Transfer pricing: operational guidance: governance: the resolution stage
Review and settlement
When the second phase of the transfer pricing enquiry has been completed with the case team having taken the decision not to seek any further information, but to proceed to form a view on the basis of the information it already has then the case must be referred to the TPG to decide how the case should be settled.
The referral is by means of a written review of the case by the case team/Transfer Pricing Specialist comprising:
- a narrative summary of the case, providing an update on the last progress review and setting out the positions of the parties
- a recommendation by the Customer Relationship Manager as to how the case should be settled to include the tax effect of the proposal
- a statement about culpability
The review should be recorded on the same template used from the start of the enquiry and additional guidance on its completion is available on the Transfer Pricing Group Intranet site.
The completed review should be sent to the appropriate review body (the LBS or LC Transfer Pricing Panel, in larger cases the Transfer Pricing Board or, in the very largest cases, Excom) as soon as possible and leaving adequate time to complete the process of resolution itself within the overall 18/36 month time limit.
The Transfer Pricing Panel should not be presented with a recommendation to litigate until a CTIAA Business International Specialist and Solicitor’s Office have given at least an indicative opinion on whether litigation steps should be taken.
Taking full account of the resolution review recommendation, will decide whether the case team should
- close the case without adjustment
- settle by negotiation or
- proceed to litigation
Where the decision is to negotiate, the review body. will authorise the case team/Transfer Pricing Specialist to settle according to clearly defined parameters.
If settlement proves elusive, the case must be referred back to the appropriate review body with further recommendations.
A transfer pricing enquiry must not be settled, nor any commitment made as to how it will be settled or negotiations entered into, before resolution review approval has been given.