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HMRC internal manual

Tonnage Tax Manual

The ring fence: Transfer pricing

Within a company

TTM07300 explains that the normal transfer-pricing rules in TIOPA10/PART4 also apply to transactions (i.e. provisions made or imposed) between UK persons, where one of those persons is tonnage tax company (and the relevant control conditions etc. are met).

This principle is extended still further, so that TIOPA10/PART4 applies even where a transaction is between two parts of a tonnage tax company: one inside the tonnage tax ring fence and one outside it.

For example, if a tonnage tax company operates a road haulage division as well as a fleet of qualifying ships, and road transport services are provided to the shipping division, the taxable profits arising from the road haulage activity must be calculated as if the road transport services were provided on arm’s length terms.


FA00/SCH22/PARA59 (transactions within a company) TTM17336