Transfer Pricing

New measures not announced in Budget 2026

Finance Bill 2025 contains two measures related to transfer pricing. 

Section 48 amends Section 891H TCA 1997 that deals with country by country reporting (CbCR).  The change is intended to give effect to the OECD’s guidance on CbCR as contained in the May 2024 report entitled “OECD CbCR Guidance” and EU Council Directive 2016/881 which enshrined OECD guidance relating to CbCR into EU law.  Section 48 provides that CbCR legislation is to be interpreted and completed in accordance with the relevant OECD guidance.  In addition Section 48 legislates for specific circumstances where the OECD guidance provides flexibility to jurisdictions for the purposes of applying the €750 million threshold for determining whether a MNE Group is within scope of CbCR obligations - the proposed law change states that the €750m threshold may be decreased pro rata where the ultimate parent company’s fiscal year end is less than twelve months. 

Section 95 amends Section 959AA TCA 1997 to allow Revenue to make or amend a tax assessment outside the normal 4-year period in order to give effect to the outcome of a mutual agreement procedure (MAP) reached under a Tax Information Exchange Agreement (TIEA). A TIEA is a bilateral agreement under which the competent authorities of two countries agree to co-operate in tax matters through exchange of information.  Ireland currently has 26 such agreements in place. This change will ensure consistency with the current provisions in Section 959AA TCA 1997 which allows a Revenue officer to make or amend an assessment outside the 4-year period to give effect to a MAP outcome reached under a double taxation agreement. 

Who will be affected and when?

The changes contained in Section 48 impact large MNE Groups that have an obligation to file CbCRs.  The changes apply to accounting periods ending on or after 1 January 2026.  The technical amendments contained in Section 95 may impact certain taxpayers that have presented a MAP case to the Irish Competent Authority where the counterparty jurisdiction has a TIEA with Ireland. The changes will be effective once the Finance Bill is signed into law. 

What now?

Whilst Finance Bill 2025 did not contain significant changes relating to transfer pricing, taxpayers need to be cognisant of the many changes in recent times such as BEPS 2.0 and other domestic law changes in countries where they operate.  In addition, arising from a number of workstreams currently underway at the OECD, we expect to see a number of transfer pricing developments over the coming months. 

In relation to intragroup services, the OECD is planning to update Chapter VII of the OECD Transfer Pricing Guidelines, with a discussion draft expected in Spring 2026. With the evolution of business models and the rise of higher-value services, the OECD consider that guidance in relation to intragroup services requires modernisation. Areas that are expected to be included in the discussion draft include the delineation of service arrangements including principles that can be applied to cloud computing and data-centres; guidance on the application of the benefit test; clarification re the interaction of transfer pricing rules and domestic deductibility rules; applying transfer pricing methods such as profit-split and CUP to services including high-value services, treatment of pass-through costs, interaction between services and intangibles; review of existing simplification measures as they relate to services and the link with global mobility. 

It is also expected that a consultation draft on updates to the OECD Model Tax Convention in relation to permanent establishments (PEs) will be forthcoming by the end of 2025.  A focus area of this guidance is expected to be home office PEs. 

Our view

Taxpayers are advised to proactively monitor developments in the jurisdictions they operate in as many countries are introducing new and/or enhanced transfer pricing regulations including documentation obligations, new timelines and tax return disclosures every year.  Whilst there has been no significant changes to Ireland’s domestic transfer pricing law in this year’s Finance Bill, ongoing OECD work is likely to mean new guidance will be forthcoming in future updates to the OECD Transfer Pricing Guidelines.