Transfer Pricing
Country Summary
Ireland
This document summarizes the transfer pricing requirements and regulations in Ireland. Ireland’s Transfer Pricing legislation, as per the Taxes Consolidation Act of 1997, aligns with the arm’s length principle detailed in Article 9 of the OECD MTC. The rules were updated in the 2019 Finance Act, broadening Transfer Pricing documentation requirements and applying them to trading, non-trading, and capital transactions exceeding €25 million. These rules do not extend to SMEs in Ireland. The OECD guidelines are integrated into Irish domestic legislation to interpret the arm’s length principle. Related parties are defined based on management, control, or capital connections. Ireland has been scrutinized as a corporate tax haven, but it is not officially classified as one. Bilateral and multilateral Advance Pricing Agreements (APAs) are available in Ireland. The audit process is termed Transfer Pricing Compliance Review, with a submission timeline of three months.
Overview:
Ireland’s Transfer Pricing Regulations
Ireland’s Transfer Pricing regulations, outlined in the Taxes Consolidation Act of 1997 (TCA), adhere to the arm’s length principle from the OECD MTC Article 9. The 2019 Finance Act extended these rules to various transaction types, including those exceeding €25 million. Notably, they don’t apply to SMEs. Ireland’s domestic legislation integrates the OECD guidelines to interpret the arm’s length principle.
Defining Related Parties
Related parties in Ireland are individuals or companies involved in each other’s management, control, or capital. This also includes connections between a company and an individual or persons connected to that individual, such as a spouse, ancestor, descendant, or sibling.
Transfer Pricing Documentation
Transfer Pricing regulations in Ireland were updated in 2019, introducing formal documentation requirements aligned with the OECD guidelines, covering both trading and non-trading transactions and those exceeding €25 million in market value.
Ireland’s Tax Environment
Ireland’s corporate tax rate is 12.5%, and while it has faced claims of being a tax haven, it isn’t officially listed as one. Irish legislation promotes corporate establishment and operation. The country doesn’t fall under the EU’s non-cooperative tax jurisdiction list.
Advance Pricing Agreements (APAs) and Audit Process
Ireland offers bilateral and multilateral APAs, even though no specific legislation empowers the Irish Revenue to conclude APAs formally. Audits may request Transfer Pricing documentation, and compliance reviews should be submitted within three months.
Transfer Pricing Documentation Levels
Ireland’s TP Documentation has three levels based on consolidated group annual turnover. The Master File is required when the MNE group’s worldwide revenue exceeds €250 million. A Local File is necessary when the MNE group reports revenue over €50 million.
Notification and Record-Keeping
Notably, only CbCR has notification requirements, targeting MNEs with annual consolidated group revenue of €750 million or more. Irish companies are obliged to maintain TP documentation for six years from the transaction’s end or from the fiscal year’s end in which the tax return is filed, even if filed late.
Penalties and Interest Charges
Penalties in Ireland for TP non-compliance vary. A tax-geared penalty applies in Revenue Audit cases, while fixed penalties relate to bookkeeping and documentation compliance. Non-submission of TP documentation results in a €4,000 penalty, which increases to €25,000 for local file omissions, escalating by €100 daily until fulfilled.