Commentary

B4.123 Transfer pricing—meaning of UK tax advantage

Business tax
Business tax | Commentary

B4.123 Transfer pricing—meaning of UK tax advantage

Business tax | Commentary

B4.123 Transfer pricing—meaning of UK tax advantage

The transfer pricing rules only apply where there is a provision between two parties that meet the participation test as described in B4.124 and the actual provision:

  1.  

    •     differs from one that would have been made between independent enterprises in other words, the arm's length provision, and

  2.  

    •     creates a potential UK tax advantage for one or both of those persons

In such situations, the profits or losses of the potentially advantaged person(s) are computed as if the arm's length provision had been made or imposed instead of the actual provision1.

This effectively means that

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