INTM450101 | Transfer pricing records: controlled transactions

The Local File should include information for each material category of controlled transactions undertaken by the UK entity, unless an exemption applies (see INTM450105 and INTM450106). The information that is required is set out in Annex II Chapter V of the 2022 Transfer Pricing Guidelines under the heading “controlled transactions”. Materiality is covered at INTM450104.

For the purposes of the Regulations, the term “controlled transaction” means a transaction or series of transactions to which the conditions in sections 147(1)(a) to (c) TIOPA 2010 apply (see INTM412020). By virtue of section 164 TIOPA 2010, HMRC considers that “controlled transactions” encompasses any “provision” established in applying s147 TIOPA 2010 (see INTM412050).

However, for the purposes of the Regulations, a provision is not considered a “controlled transaction” if the participation condition is met only because the acting together conditions at either section 161 or section 162 TIOPA 2010 are met (see INTM413180). Such transactions do not need to be included in the Local File.