Corporate Tax

Ireland’s Anti-Hybrid Rules

Tax system arbitrage as a result of exploiting differences in the treatment of certain payments and entities cross border can lead to tax advantages. To counteract this, the EU Anti-Tax Avoidance Directive (ATAD) mandated a number of changes be made to the domestic laws of all EU member states. Anti-hybrid rules were introduced to Irish tax law for the first time from 1 January 2020.

Broadly, the anti-hybrid rules apply to transactions between “associated enterprises” and aim to prevent taxpayers from exploiting differences in countries’ tax systems by obtaining a double deduction for the same expense or by securing non-taxation of income that has been deducted for tax purposes elsewhere. The two key ways in which the anti-hybrid rules achieve this are by either disallowing the expense deduction by the payer or by imposing taxation of the income in the hands of the recipient. The anti-hybrid rules will apply to payments made or arising on or after 1 January 2020.

Transfer Pricing Rules Summary Placemat

Ireland’s Department of Finance conducted a public consultation into updating Ireland’s transfer pricing regime to align with the most recent OECD guidance as contained in the 2017 OECD Transfer Pricing Guidelines.

Finance Act 2019 was signed into law in December 2019 and contains provisions that materially update Ireland’s domestic transfer pricing provisions. The changes are effective for chargeable periods beginning on/after 1 January 2020, and in respect of claims for capital allowances, where the related capital expenditure is incurred on or after 1 January 2020.

The placemat contacts a summary of the key changes contained in Finance Act 2019.

EU Mandatory Reporting Rules – DAC6 Hallmarks

DAC6 imposes the obligation to disclose details of certain reportable cross border arrangements (RCBA) which meet one or more specified characteristics (hallmarks) with a view to improving tax transparency and exchange of information between EU Member States.

This document provides an overview of the hallmarks that must be considered in determining if a reporting obligations exist.

EU Mandatory Reporting Rules

DAC6 imposes the obligation to disclose details of certain reportable cross border arrangements (RCBA) which meet one or more specified characteristics (hallmarks) with a view to improving tax transparency and exchange of information between EU Member States.

This document provides an overview of the obligations under DAC6, who has such obligations and practical steps companies are taking.