HM Revenue & Customs (HMRC) has announced the launch of a new ‘profit diversion compliance facility’ designed to encourage Multinational Enterprises (MNEs) to disclose mistakes and/or non-compliance related to profits diverted from the UK through incorrect transfer pricing arrangements.
HMRC are aware that some companies with international operations are diverting profits overseas that should be subject to diverted profits tax (DPT), but have not disclosed the amounts to date or corrected historic and out of date transfer pricing policies.
The new facility will allow companies to register before HMRC launches an investigation, pay the tax and make a full report within six months, which will then be treated as an ‘unprompted’ disclosure for penalty purposes.
Companies have until 31 December 2019 to register and benefit from the terms of the facility.