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Ireland’s Transfer Pricing Rules – Proposed Changes

Ireland currently has transfer pricing rules in place which require the arm’s length principle to apply to transfer prices between related parties. These rules directly incorporate the OECD 2010 Transfer Pricing Guidelines. However, in line with the recommendations made in the Review of Ireland’s Corporation Tax Regime (the “Coffey Review”), the Irish Government has taken steps to review and update Ireland’s current transfer pricing rules to ensure they are in line with new international best practice and the most recent 2017 OECD Transfer Pricing Guidelines (the “2017 Guidelines”).


  • 10 July 2017 – The OECD release the 2017 Transfer Pricing Guidelines.
  • 13 September 2017 – Publication of the Coffey Review recommending the incorporation of the 2017 Guidelines into Irish law.
  • 3 July 2018 - The OECD release a Discussion Draft on the transfer pricing aspects of financial transactions.
  • 5 September 2018 – The Department of Finance publish Ireland’s Corporation Tax Roadmap, highlighting the government’s commitment to updating Ireland’s transfer pricing rules.
  • 18 February 2019 – The launch of a public consultation on transfer pricing (“the public consultation paper”) by the Department of Finance.
  • 2 April 2019 – Deadline for responses to the public consultation paper.2 September 2019 – The Irish government release a feedback statement on the public consultation paper.
  • 13 September 2019 – Deadline for submissions in response to the feedback statement on the public consultation paper.
  • 1 January 2020 – Expected date for the implementation of the new transfer pricing rules.

Department of Finance Public Consultation – Feedback Statement

The Department of Finance has published a feedback statement responding to the public consultation it launched on the proposed update to Ireland’s transfer pricing rules which contains draft legislation to update Ireland’s domestic transfer pricing regime from 1 January 2020.

The draft legislation contained in the feedback statement represents a fundamental rewrite of the existing domestic transfer pricing law and it is expected the contents of the feedback statement will materially be included in the forthcoming Finance Bill in October 2019.

The relevant draft provisions are discussed below.

The 2017 Guidelines

Draft legislation seeks to incorporate the 2017 OECD Transfer Pricing Guidelines into Irish law (including OECD guidance on Application of the Transactional Profit Split Method, Hard-to-Value Intangibles and any additional guidance which the OECD may publish subsequent to the updating of the current domestic legislation).

Basic Rules for Transfer Pricing

The feedback statement suggests that S.835C TCA 1997, which outlines the basic transfer pricing provisions, be updated and expanded such that the legislative wording make reference to the transfer pricing rules applying to relevant transactions within the charge to tax. The suggested new reference is one to “tax” rather than specifically Case I/II transactions. Therefore based on the feedback statement Case III, IV and V transactions may be subject to these rules. The scope of the legislation also extends to arrangements relating to the acquisition and disposal of chargeable assets (e.g. tangible and intangible assets).

Also included in the draft S.835C TCA 1997 are new provisions which allow for the recharacterisation of transactions such that arm’s length conditions are to be determined by the actual commercial or financial arrangements in place where the form of the financial or commercial arrangement is inconsistent with the substance of the relations between related parties transacting with each other.

Non-Trading Transactions

The new proposed s.835CA TCA 1997 should be read in conjunction with S.835C TCA 1997. The legislation includes an exemption for domestic non-trading transactions (i.e. where both parties are within or subject to the charge to Irish tax for Case III to V transactions). Although this exemption will not apply where one of the Irish tax resident companies is subject to tax under Case I/II or the arrangement between the two Irish tax resident companies is part of a scheme involving a second arrangement (presumably with a foreign related party) and the main purpose of the first arrangement between the two Irish tax resident companies is to obtain a tax advantage in connection with the second arrangement.


Ireland’s current transfer pricing rules include grandfathering provisions whereby arrangements, the terms of which were entered into pre July 2010, are not within the scope of the existing transfer pricing rules. It is anticipated that these arrangements will be within in the scope of the new transfer pricing rules for chargeable periods commencing from 1 January 2020. Although the grandfathering provisions may still apply for documentation purposes where both parties to the transaction are Irish tax resident companies (albeit there will still be a requirement for these transactions to be at arm’s length).

Documentation & Capital Transactions

Increased documentation requirements may be incorporated in the new legislation (with the requirement for companies to prepare and maintain a Master File and Local File), it is proposed that a revenue threshold of €250 million and €50 million respectively apply.

Similarly, transaction value/capital expenditure thresholds of €25m have been included in the draft legislation that seeks to extend the transfer pricing rules to capital transactions.


The extension of the new transfer pricing rules to SME’s has also been included in the draft legislation. Although the requirement for the preparation and maintenance of transfer pricing documentation may only extend in certain circumstances, as an exemption may apply for small enterprises and medium enterprises in circumstances whereby the transaction consideration does not exceed €1 million and one party to the transaction is not subject to Irish tax. Simplified transfer pricing documentation requirements have also been proposed for medium enterprises that do not meet the above exemption.

The feedback statement also notes that the extension of the new transfer pricing rules to branch profit attribution may be delayed.

Practical Implications for the Financial Services Industry

The extension of transfer pricing rules to non-trading transactions will likely have an impact for many companies in the financial services industry. Although the legislation remains draft, securitisation companies (whose profits are taxed under Schedule D Case III) may be brought within the scope of the new transfer pricing rules. Furthermore, companies with cross-border interest-free loan structures in place will also need to consider the implications of these rules (in particular the anti-avoidance provisions proposed in S.835CA).

As tax authorities are relying more on the use of recharacterisation rules to confirm that the consideration in an intra-group transaction is arm's-length, intra-group financing arrangements are also likely to come under increased scrutiny, as seen in Chevron Australia Holdings Pty Ltd v Commissioner of Taxation [2017] FCAFC 62. If the draft legislation is introduced, taxpayers will need to consider both the OECD and Irish domestic provisions in this area when determining the characterisation of intercompany transactions for transfer pricing purposes.

Next Steps

The new transfer pricing rules will likely apply to chargeable periods from 1 January 2020 onwards. Taxpayers should therefore be reviewing their existing structures, their operating models and any existing transfer pricing policies in place in order to be sufficiently prepared in advance of the anticipated 1 January 2020 commencement date.

This article was first published in Finance Dublin and kindly re-published on Deloitte website with their permission.

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