Transfer pricing, permanent establishments and diverted profits tax (DPT) consultations

Last updated: 10/03/2026

Finance (No. 2) Bill 2024-26 contains legislation with the broad aim of simplifying the UK’s international tax rules where possible, and aligning them with internationally agreed principles in the OECD Model Tax Treaty and Transfer Pricing Guidelines, including by:

Introducing a general exemption from UK-UK transfer pricing (subject to certain exceptions);
Making changes to the transfer pricing of financial transactions including implicit support for loans and guarantees;
Updating permanent establishment definitions and profit attribution rules; and
Repealing DPT as a separate tax and creating new rules within corporation tax for unassessed transfer pricing profits.

A new ‘International Controlled Transactions Schedule’ (ICTS) for the reporting of cross-border related party transactional data in a structured format to HMRC is to be introduced.
Timing: in most cases, the changes will take effect for corporation tax accounting periods commencing on or after 1 January 2026. HMRC expect that the ICTS requirement will apply for accounting periods beginning on or after 1 January 2027.