Transfer Pricing
Budget 2026
Key measures
Whilst there were no transfer pricing related measures contained in Budget 2026, broader developments in many jurisdictions and at the OECD level are of relevance to Irish taxpayers.
The imposition of tariffs on a wide range of goods in many countries, including Ireland by the United States, creates many significant challenges for taxpayers in respect to their transfer pricing models and pricing. The 15% tariff rate agreed between the EU and the US during the summer provides some measure of certainty but affected taxpayers should assess their supply chains to minimise the impact of the tariffs.
At an OECD level, BEPS 2.0 (including work on Pillar 1 and 2) continues to reshape the tax environment with significant changes now taking effect. In February 2025, the OECD released their consolidated report on Amount B containing agreed materials on Amount B released by the Inclusive Framework up to the end of 2024. Ireland introduced measures in Finance Act 2024 relating to Amount B which came into effect from 1 January 2025.
On the dispute front, the most recent OECD statistics show continuing increases in the number of cases availing of the mutual agreement procedure (MAP) as well as advance pricing agreements (APA) cases initiated.
In Ireland, transfer pricing tax controversy continues to be very active with close to 100 MAP cases and 80 APA cases active at the end of 2024. The increase in closing inventories for MAP and APA cases indicates that transfer pricing related disputes involving Ireland remains prevalent. The continued popularity of APAs also shows taxpayers continue to see real value in managing transfer pricing controversy upfront through proactive engagement with tax authorities seeking to avoid the risk of audit.
Who will be affected?
Whilst many formal reporting and documentation obligations only apply to large multinational groups with Irish operations, transfer pricing developments globally will continue to impact a much broader population of companies.
When? What to do now?
Navigating the uncertain tax landscape can be challenging for taxpayers both large and small. Taxpayers should be reviewing their transfer pricing policies and footprint globally to ensure alignment with the latest tax rules as well as broader economic challenges such as tariffs. In addition, having robust economic support and transfer pricing documentation provides the first line of defence in relation to potential tax authority challenges. Taxpayers will also need to remain agile and proactively identify tax risks and establish strategies to deal with such risks in a timely manner.
Our view
Taxpayers are advised to proactively monitor developments in the jurisdictions they operate in. We observe many countries introduce new and/or enhanced transfer pricing regulations including documentation obligations, new timelines and tax return disclosures every year. The importance of actively monitoring developments and having a strategy to deal with such developments has been never more important.
