Budget follow-up: Dismay at transfer pricing extension
Business was dismayed this week when the chancellor ignored pleas for a delay and pushed ahead with measures to extend transfer pricing rules to transactions between UK group companies.
Link: Budget 2004
The rules had only applied to transactions between parent companies and overseas subsidiaries. Many observers have complained that an extension of the rules would create massive administrative costs and burdens for UK companies.
Sara Pickering, a partner at Ernst & Young, said: ‘It’s disappointing that the new rules for UK transactions has been introduced so quickly before enterprise has had time to prepare.’
Transfer pricing rules are designed to ensure that transactions between companies in the same group are carried out at fair values and not at unfairly advantageous prices.
