INTM450080 | Transfer pricing records: where an MNE group does not meet the CbCR threshold

Under the general duty to keep and preserve records, a relevant person is not required to keep and maintain the specified transfer pricing records for UK entities that are not part of an MNE group that meets the CbCR threshold (see INTM450020), however they are still required to keep records to make and deliver a correct and complete return.

For UK entities that have provisions within the scope of Part 4 of the Taxation (International and Other Provisions) Act 2010 (TIOPA 2010), a relevant person is required to keep such records (see INTM483030) as are needed to demonstrate that transactions with related parties have been identified and determined for tax purposes according to transfer pricing rules (and, in particular, the application of the arm’s length principle; see INTM412040).

For those not obliged to keep and preserve a Master File and Local File in accordance with the 2022 Transfer Pricing Guidelines, the guidelines still represent the standard approach recommended by the OECD. HMRC is of the view that an appropriate way to demonstrate that provisions between related parties adhere to the arm’s length principle is to prepare documentation in line with the OECD’s recommended approach even where the MNE group test is not met.