INTM450030 - Transfer pricing records: who has the record keeping obligation?

Per the general record keeping obligations set out in paragraph 21 of Schedule 18 to Finance Act 1998 and section 12B of the Taxes Management Act 1970, the obligation to keep and preserve such records as may be needed to deliver a correct and complete return falls on any person that may be required to file a return.

The obligation to keep and preserve the specified transfer pricing records also falls on any person who may be required to file the return, which may not be the same as the UK entity considered for the MNE group test (see INTM450020).

The person with the obligation to file the return and with the obligation to keep the specified transfer pricing records is referred to as the “relevant person”. The term “relevant person” is defined in regulation 2(1) of the Regulations. This term is used to differentiate between the “relevant person” with the record keeping obligation and the “UK entity” for the purposes of the MNE group test.

The relevant person is:

• the company that satisfies the MNE group test
• the partners of the partnership that satisfies the MNE group test
• the trustees of the trust that satisfies the MNE group test

For companies, the company itself is the relevant person that has the record keeping requirement (FA98/SCH18/PARA21). The company will also be the UK entity for the purposes of the MNE group test.

For partnerships and trusts, the record keeping requirement falls on any of the partners of the partnership or any of the trustees of the trust who may be required to make and deliver a return, rather than on the partnership or trust itself (TMA70/S12B) (see CH10400).

However, it is the partnership or the trust which is the UK entity for the purposes of the MNE group test.