The UK’s HM Revenue and Customs today announced that it is offering a “Profit Diversion Compliance Facility,” providing multinationals a special opportunity to put their transfer pricing arrangments into compliance with OECD norms.
MNE Tax will provide an in-depth look at this breaking news in the next day or two.
In the meantime, here are a few first takes about the new guidance on Twitter:
HMRC are providing a carrot – we probably won’t charge penalties or institute criminal proceedings (!). And a stick – we will use the DPT, we will probably charge penalties, and we will talk to our colleagues in the Fraud Investigation Service.
— Dan Neidle (@DanNeidle) January 10, 2019
Very wide scope of content required in disclosure report; incl info on residence, PE, WHT, CFCs, hybrids, indirect taxes. Effectively a full investigation of TP and related risk areas, conducted by taxpayer, to try to obtain 19% CT for TP (instead of 25% DPT) and a lower penalty.
— Julian Feiner (@jmfeiner) January 10, 2019
I think “amnesty” is not quite the right phrase – all tax has to be paid, and penalties, if applicable will be due at the lower “unprompted” scale rather than being remitted entirely.
— Glyn Fullelove (@glyn12gh) January 10, 2019
“Companies should recognise and pay tax on profits where the economic activities to generate those profits are carried out” (HMRC guidance on profit diversion compliance facility)…..no mention of value creation…is the tide turning…. https://t.co/CalnEvQZ7r pic.twitter.com/eL4Ae8LKyt
— TommasoFaccio (@FaccioTommaso) January 10, 2019
We will be following up on this topic with an in-depth report shortly. Stay tuned.
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