Friday, 17 February 2017

HMRC published guidance February 6th on the transfer pricing aspects of cash pooling. The guidance, which was prepared following several months of drafting, provides examples illustrating the potential areas of challenge associated with a cash pooling arrangement, in particular in light of the recent OECD BEPS publications. The guidance also provides insights into how a cash pool is defined; the key participants in the cash pool; how to set interest rates for the pool; how to remunerate the pool leader; withholding tax for cash pools; and the potential implications of long-term balances remaining with a pool for a sustained period. Companies should consider whether their cash pooling arrangements align with this new guidance as this will be influential in any UK tax audit.

Source: PwC