Irish Department of Finance Changes to Local Transfer Pricing Regulation

25 June 2020
Amanda Pletz, Dr. Emmanuel Llinares, Bernardo Danesi, and Diana Kabir

In a new paper, Associate Director Amanda Pletz, Managing Director Dr. Emmanuel Llinares, Consultant Bernardo Danesi, and Economic Analyst Diana Kabir summarise the recent changes to the Irish transfer pricing regulation described in Finance Act 2019 Number 45, in effect since January 2020.

The instrumental change has been the ratification of the 2017 OECD Transfer Pricing Guidelines (TPG) into Irish legislation alongside additional OECD guidance on profit split and hard-to-value intangibles, amongst others. However, other changes were also introduced, including:

  • The introduction of a requirement to prepare master file and local file documentation, subject to a €250m and €50m annual group consolidated revenue threshold respectively;

  • The introduction of a deadline for preparing TP documentation in line with the Irish corporation tax return filing deadline;

  • An extension of the TP rules to include non-trading transactions;

  • The application of TP rules to capital transactions where the market value of the asset exceeds €25 million; and

  • The application of the TP rules to medium-sized enterprises in respect of transactions where the consideration payable exceeds EUR 1 million.

The authors describe what these changes mean for taxpayers and how NERA’s Global Transfer Pricing Practice can help clients navigate the implications of these changes in transfer pricing analyses and compliance.