- In April 2025, HMRC published a second round consultation 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 separate transfer pricing consultation proposes a new ‘International Controlled Transactions Schedule’ (ICTS) for the reporting of cross-border related party transactional data in a structured format to HMRC. The removal of the medium sized enterprise exemption is also being considered.
- Timing: consultations closed on 7 July 2025.
Resources (click to open)
