Ireland has to a large extent, a light touch transfer pricing regime. Irish legislation governing transfer pricing is to be found in Sections 835A to 835H Taxes Consolidated Act 1997. Under Irish legislation the following is excluded from transfer pricing regulation:

1. Small and medium enterprises with staff of less than 250 and either has turnover under €50 Million or assets under €43 Million,
2. Grand fathering arrangements put in place before 1 July 2010 and not changed since
3. Arrangements between non-associated persons
4. Non-trading activities

The Irish Revenue do not propose to carry out audits in relation to transfer pricing issues for the present. Instead, they invite companies to do a “transfer price compliance review” and then within a 3 month time period, provide the Revenue with details under the following headings:

1. Group Structure
2. Type of related party transactions
3. Pricing structure and methodology
4. The functions, assets and risks of the parties
5. Documentation available
6. Basis of satisfaction of the “arm’s length principal”

The “arm’s length principal” is imposing pricing and sale conditions on the same basis as would be expected between independent parties. If a person fails to co-operate with a “transfer pricing compliance review”, then a Revenue audit may result. In general, only the largest companies and multinationals are likely to be within the scope of Irish transfer pricing rules. Cooney Carey can provide comprehensive information in relation to Irish transfer pricing rules and the documentation that should be maintained in relation to same.

What questions do you have?

We are happy to help. Please post your comment below or contact Gerry Higgins, Tax Partner on 01 677 9000 or by email: ghiggins@cooneycarey.ie.

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