Citation, commencement, effect and interpretation

1. —(1) These Regulations may be cited as the Transfer Pricing Records Regulations 2023 and come into force on 9th August 2023.

(2) These Regulations have effect—

(a) for corporation tax purposes, in relation to accounting periods beginning on or after 1st April 2023;

(b) for income tax purposes, in relation to the tax year 2024-25 and subsequent years.

(3) In these Regulations—

“ controlled transaction ” has the meaning given in regulation 3;

“ Local File ” and “Master File” have the same meaning as they do in the transfer pricing guidelines( 4 );

“ MNE Group ” has the meaning given in regulation 2(3) of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016( 5 );

“ relevant person ” has the meaning given in regulation 2(1);

“ relevant tax period ” has the meaning given in regulation 2(2);

“ specified person ” has the meaning given in regulation 3(2);

“ TIOPA 2010 ” means the Taxation (International and Other Provisions) Act 2010( 6 );

“ TMA 1970 ” means the Taxes Management Act 1970.

Meaning of relevant person and relevant tax period

2. —(1) “ Relevant person ” means—

(a) a company which may be required by a notice under paragraph 3 of Schedule 18 to the Finance Act 1998 (company tax return)( 7 ) to make and deliver a return for a relevant tax period,

(b) a person who may be required by a notice under section 8A of TMA 1970 (trustees return)( 8 ) to make and deliver a return for a relevant tax period, or

(c) a person who may be required by a notice under section 12AA of TMA 1970 (partnership return)( 9 ) to make and deliver a return for a relevant tax period.

(2) “ Relevant tax period ” means a tax period—

(a) in respect of which—

(i) the person mentioned in paragraph (1)(a),

(ii) in relation to the person mentioned in paragraph (1)(b), the trustees of the trust concerned, or

(iii) in relation to the person mentioned in paragraph (1)(c), the partnership to which the partnership return relates,

together with one or more other enterprises, constitutes an MNE Group, and

(b) in respect of which the MNE Group meets the threshold requirement within the meaning of regulation 3(2) to (4) of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016.

(3) In paragraph (2), “ tax period ” has the meaning given in paragraph 28(g) of Schedule 24 to the Finance Act 2007.

Meaning of controlled transaction

3. —(1) In these Regulations, and in the transfer pricing guidelines so far as they apply for the purposes of these Regulations, a transaction or series of transactions is a “ controlled transaction ” in relation to a relevant person if—

(a) provision has been made or imposed between a specified person and another person (“the other affected person”) by means of the transaction or series of transactions,

(b) the participation condition in section 148 of TIOPA 2010 is met in relation to that provision,

(c) that condition is not met only because of section 161 or 162 of TIOPA 2010 (indirect participation: financing cases), and

(d) the provision is not within section 147(7) of TIOPA 2010 (transactions involving oil).

(2) In these Regulations, “ specified person ”, in relation to a relevant person, means—

(a) in the case of a company, the relevant person,

(b) in the case of a trust, the trustees of the trust of which the relevant person is a trustee, and

(c) in the case of a partnership, the partners in the partnership of which the relevant person is a partner.

(3) In paragraph (1), “ transaction” and “series of transactions ” have the meanings given in section 150 of TIOPA 2010.

Obligation to keep and preserve relevant transfer pricing records

4. —(1) A relevant person must keep and preserve the relevant transfer pricing records specified in regulation 5 that relate to the relevant tax period.

(2) But paragraph (1) does not apply to a relevant person (“ P ”) if, were P to be subject to the obligation in that paragraph, P would not be required to include any information about controlled transactions in the Local File.

Specified relevant transfer pricing records

5. —(1) The following are specified relevant transfer pricing records for the purposes of section 12B of TMA 1970 and paragraph 21 of Schedule 18 to the Finance Act 1998—

(a) the records listed in column 1 of the table, and

(b) any other records specified in a notice published in accordance with paragraph (4).

(2) Except where regulation 6 applies, the records listed in the table must—

(a) contain the information described in the documents referred to in column 2 of the table, and

(b) be kept and preserved in the form and manner set out in those documents.

(3) The table for the purposes of paragraph (1) and (2) is as follows.

(4) The Commissioners for His Majesty’s Revenue and Customs may specify in a published notice—

(a) supplementary information relating to the preparation of the Local File, and

(b) the form and manner in which that information is to be kept and preserved.

Information that may be excluded from the Local File

6. —(1) A relevant person does not have to include information in the Local File in respect of a controlled transaction where, at any time during the relevant tax period, the specified person and the other affected person are each—

(a) a company resident in the United Kingdom for tax purposes,

(b) trustees of a trust where the trustees are resident in the United Kingdom for tax purposes in accordance with section 475 of the Income Tax Act 2007( 12 ), or

(c) partners in a partnership where all of the partners are resident in the United Kingdom for tax purposes.

(2) Paragraph (1) does not apply if—

(a) the specified person and the other affected person are members of the same MNE Group, and

(b) in respect of the relevant period—

(i) one or both of them has made an election under section 357A of the Corporation Tax Act 2010(election for special treatment of profits from patents etc.)( 13 ), or

(ii) one or both of them is carrying on a ring fence trade.

(3) A relevant person does not have to include information in the Local File in respect of a controlled transaction where, during the relevant tax period, an advance pricing agreement made on or before 31st March 2023 has effect in relation to that transaction.

(4) In this regulation—

“ advance pricing agreement ” means an advance pricing agreement described in section 218 of TIOPA 2010;

“ the other affected person ” has the meaning given in regulation 3(1)(a);

“ ring fence trade ” in relation to—