Taxation (International and Other Provisions) Act 2010 section 176

Claims under section 174: advantaged person must have made return

Section 176 requires that before a disadvantaged person can make a compensating adjustment claim under section 174, the advantaged person must already have had their profits calculated on an arm's length basis, and the claim must be consistent with that calculation.

• A compensating adjustment claim under section 174 cannot be made unless the advantaged person's profits have already been calculated using the arm's length provision instead of the actual provision.
• Any claim made by the disadvantaged person must be consistent with the arm's length calculation already applied to the advantaged person.
• The arm's length calculation is treated as having been made if the advantaged person's own tax return includes figures calculated on an arm's length basis under the transfer pricing rules.
• Alternatively, the calculation is treated as having been made if HMRC has issued a relevant notice (as defined in section 190) to the advantaged person that reflects a transfer pricing determination on an arm's length basis.