DST47200 - DST Implications for Transfer Pricing

It is possible that the functions, assets and risks involved in providing the relevant activity are spread across more than one entity in the group. For example, one entity may own and control the platform’s intellectual property and another may act as the sales and marketing entity for the group.

Where there are controlled transactions between associated enterprises in the group, the companies should consider the treatment of the DST charge in arriving at the arm’s length price. In particular, they should ask whether at arm’s length the company that paid and/or is liable to DST would have borne the cost of the DST expense, or whether it would have looked to recover some or all of the expense within the new transfer price.