UK Issues Statistics About Transfer Pricing and Diverted Profits Tax

The UK tax authority HMRC released statistics relating to transfer pricing and diverted profits tax.

Transfer Pricing

In 2017/2018, HMRC raised £1.68 billion additional tax revenue from transfer pricing adjustments, a slight increase as compared £1.61 billion in 2016/2017. The average age of open enquires increased while the average time to settle an enquiry reduced from 28.8 months in 2016/2017 to 24.7 months in 2017/2018. As for the advanced pricing agreement (APA), there is a significant decrease of application in 2017/2018 but the number of cases agreed grew from 19 to 27 in 2018. The average time to conclude an agreement increased by 4.3 months, reaching 37.1 months in 2018. Both the number of advance thin capitalisation agreement (ATCA) approved and in force decreased during 2016/2018. In 2017/2018, 79 advance thin capitalisation agreement are approved and the total number of agreements in force reaches 366. The average time to reach agreement increased from 14.9 months to 16.2 months in 2018. In addition, the statistic shows that 71 mutual agreement procedure cases are resolved, and 103 cases were admitted in 2017/2018. It takes an average of 27.5 months to resolve the cases.

Diverted Profits Tax

The figures of DPT reflect the amount raised from the issue of DPT charging notices and additional amounts of corporation tax resulting from behavioural change. This figure was £388 million in 2017/2018, having increased from £281 million in 2016/2017. The number of DPT notifications received by HMRC has grown from 145 to 220 in 2017/2018.

Source: HMRC

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