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Ireland launches consultation on new transfer pricing regime

Consultation on new transfer pricing regime

This consultation seeks feedback on a number of aspects of Ireland’s current transfer regime .

This consultation seeks feedback on Ireland’s current transfer regime.

On 18 February 2019, Ireland’s Department of Finance launched a public consultation on Ireland’s transfer pricing regime. As announced in Ireland’s Corporation Tax Roadmap released in September 2018, Ireland intends to legislate in Finance Bill 2019 updates to Ireland’s transfer pricing rules to take effect from 1 January 2020. The consultation period will run until 2 April 2019.

This consultation seeks feedback on a number of aspects of Ireland’s current transfer pricing regime and explores a range of issues that will arise in moving from the current rules to a new regime. These include:

  • OECD 2017 guidelines - outline specific issues that may arise from the adoption of the 2017 OECD guidelines
  • Grandfathered arrangements - detail specific issues arising from ending the exclusion from transfer pricing of arrangements in place prior to 1 July 2010 under existing grandfathering provisions
  • SMEs – should the transfer pricing rules be extended to apply to SMEs and if so, what level of documentation would be appropriate to demonstrate compliance but also mitigate the additional compliance burden 
  • Non-trading income - outline the issues that may arise upon application of transfer pricing to non-trading income and how these may be resolved
  • Capital transactions – are the current market value rules sufficient so that capital transactions should remain outside the scope of the transfer pricing rules 
  • Documentation - outline the issues arising from enhanced documentation requirements and in what circumstances should a reduced standard of documentation apply
  • Branches – should transfer pricing rules apply to the taxation of branches in Ireland in line with the Authorised OECD approach.

Click here to view the consultation document.

Transfer pricing is a critical area for Irish business and changes in the areas concerned could have a significant impact. It is important that taxpayers consider the potential impact and feed into the transfer pricing consultation process. The KPMG transfer pricing team will be providing an opportunity for clients to understand the issues involved and their potential impact to allow Irish business respond to this opportunity provided. Please contact your KPMG transfer pricing team member should you wish to discuss any aspect of this.