Transfer pricing and thin cap

As businesses continue to grow and evolve globally, HMRC is increasing focus on compliance requirements for transfer pricing. Transfer pricing concerns the pricing of transactions between related parties. Many territories’ tax codes require the terms for intra-group transactions to reflect those that would be agreed between independent parties and have this position reflected in companies’ tax returns.

Your company may fall under the thin capitalisation rules if it has excessive debt in relation to its arm’s-length borrowing capacity, leading to the possibility of excessive interest deductions.

We help businesses assess their capital management and ensure they stay compliant with the transfer pricing rules.

We also advise on transactions between the UK and other jurisdictions, calling on the expertise of Andersen’s global professional services platform.