UUÂãÁÄÖ±²¥

What is transfer pricing?

Transfer pricing is the price at which an enterprise transfers either physical goods, intangible property or services, including financing arrangements, to associated enterprises. Generally, enterprises are associated if there is direct or indirect control by one of the enterprises of the other, or they are under common control. For these purposes, direct control means the ability to determine how the affairs of the company are conducted by virtue of the shareholding, voting rights or any powers within the articles of association or other document regulating the company or any other company. Determining whether indirect control exists depends on including rights and powers which are available in the future or which are held by other persons.

Transactions made between the parent company and subsidiary may be subject to the UK transfer pricing rules, which could result in an adjustment being required in the UK corporation tax return if such transactions are not considered by HMRC to be carried out on an arm’s length basis. The maintenance of appropriate documentary evidence is also required by