In R (o.a.o Refinitiv Ltd and others) v HMRC [2023] UKUT 257 (TCC) (20 October 2023) the UT dismissed the claimant companies’ judicial review claim finding that there was no inconsistency between diverted profits tax (DPT) notices issued by HMRC in respect of the 2018 accounting period (which included a charge to tax using a ‘profit-split’ arm’s length pricing for the relevant services) and the terms of an advance pricing agreement (APA) (which used a ‘cost-plus’ arm’s length pricing methodology in respect of the same services) whose contractual term had expired at the end of 2014.
The claimant companies provided services (including services in respect of software new product and content development and data hosting) to a Swiss-based group entity which centrally held valuable intellectual property (IP) assets. The DPT notices charged the claimants to tax for the 2018 accounting period by reference to a ‘relevant alternative provision’ (RAP)...
