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Ireland: Consultation on new transfer pricing regime

Ireland: Consultation on new transfer pricing regime

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

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Ireland’s Department of Finance on 18 February 2019 released the public consultation document [PDF 472 KB] concerning Ireland’s transfer pricing regime. As announced in Ireland’s “Corporation Tax Roadmap” (September 2018), the consultation indicates that Ireland intends to update Ireland’s transfer pricing rules, with an effective date of 1 January 2020. The consultation period will run until 2 April 2019.

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

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

KPMG observation

Transfer pricing is a critical area for Irish business, and changes in the areas concerned could have significant implications. Thus, it is important that taxpayers consider the potential changes and consider making comments during the transfer pricing consultation process.
 

Read a February 2019 report prepared by the KPMG member firm in Ireland

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