Transfer Pricing measures expected but should be broadly neutral - Deloitte

Will not impact Ireland’s attractiveness as a location for investment-

Companies may perceive Irish Revenue more readily available to assist them

The formal transfer pricing law published in the Finance Bill this afternoon is one that has been expected in the context of the current worldwide tax environment. However the measures should be broadly neutral for Irish plcs and multinationals operating in Ireland.

Joan O’Connor, Head of Transfer Pricing, Deloitte commented:

“One of the fallouts from the economic crisis is the more complex and prescriptive world-wide regulatory environment. The effectiveness of the larger nations in driving the tax agenda was demonstrated through the efforts of the G20 in increasing the level of exchange of tax information and the focus on tax transparency. The introduction of a formal new transfer regime is not unexpected in the context of a renewed focus on regulation and indeed the move by tax exchequers worldwide to further protect their own tax bases. Given the scope of the law and the focus on regulation globally, the introduction of this law should be neutral as regards Ireland’s attractiveness as a location for investment.

“Large multinational companies and their advisors already deal with transfer pricing issues on a day to day basis with foreign taxation authorities and therefore Ireland’s new law should not be a significant additional burden to them.

“It is vital that Ireland remains high on the agenda when companies decide where to locate. One of the benefits of the new law is that companies may perceive that Irish Revenue is more readily available to assist them in defending their pricing policies when in discussion with overseas tax authorities on adjustments.”

Further analysis on the Finance Bill will be available on www.deloitte.com/ie/financebill2010.

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