HMRC yesterday launched a consultation on a package of reforms to three important parts of the UK tax code. The areas being reviewed, which all have an international element, are transfer pricing, permanent establishments and diverted profits tax.
The consultation contains a number of proposals, several of which consist of fairly technical amendments to the current rules, but some of the more easily digestible highlights include:
1. considering how and whether to relax the UK's transfer pricing regime in respect of wholly domestic transactions;
2. removing diverted profits tax status as a separate tax and bringing it within corporation tax; and
3. amending the UK's domestic rules relating to "permanent establishments", potentially so that they are more closely aligned with the position in the OECD's model double tax treaty.
HMRC is planning a series of meetings to engage with taxpayers and advisers, and we will be looking to participate in those discussions, directly and through the various representative bodies that we are a part of.
The consultation, which runs until 14 August, can be found here
