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HMRC internal manual

Museums and Galleries Exhibition Tax Relief

Museums and Galleries Exhibition Tax Relief; avoidance; transfer pricing

Part 4 Taxation (International and Other Provisions) Act 2010

In applying transfer pricing rules, the UK observes the Transfer Pricing Guidelines issued by the OECD (‘Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, Organisation for Economic Co-operation and Development, Paris, 1995’). Such rules apply to exhibitions as they do to any other sector of the economy.

Paragraph 1.55 of the OECD guidelines addresses the impact of Government policies when determining the transfer price of transactions between connected parties. They make clear that such Government interventions should be treated as conditions of the market which should be taken into account in evaluating the transfer price. Once this has been done, the question arises whether, in the light of these conditions, the transactions undertaken by the connected parties are consistent with transactions between independent enterprises.