Transfer pricing, permanent establishment and diverted profits tax consultation

As part of the tax administration and maintenance day on 27 April 2023 the government announced that it would publish in May a consultation on simplifying and updating the legislation in relation to diverted profits tax (DPT) transfer pricing (TP) and permanent establishments (PE).

In making this announcement the government stated that the purpose of the consultation would be to ‘ensure that their application is clear to taxpayers and the outcome of their application remains consistent with the underlying policy intention international standards and the UK’s bilateral treaties’. The consultation was finally published on 19 June 2023 and will run until 14 August 2023.

The consultation states that the proposed package of reforms is intended to: improve fairness ensuring that multinational enterprises (MNEs) pay tax on profits generated from economic activity in the UK in the same way as other businesses;...