Ireland's Retroactive Exchange Of Information Regime

Author:Mr Joe Duffy and Tomas Bailey
Profession:Matheson
 
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The Irish Revenue Commissioners ("Revenue") recently confirmed that Ireland's spontaneous exchange of information regime (the "Regime") will apply to certain tax rulings issued as far back as 1 January 2010. Taxpayers should review confirmations and opinions received from Revenue on international tax matters since that date to determine the extent of what may be exchanged.

The Regime

The Regime is based on a combination of the framework proposed by the OECD under BEPS Action 5 (the "OECD Framework") and the EU Council Directive 2015/2376 (the "EU Rules"). In general, the Regime applies to rulings relating to transactions with a cross-border impact such as:

(i) cross-border rulings relating to preferential regimes (ie, the knowledge development box);

(ii) cross-border advance pricing agreements ("APA");

(iii) cross-border rulings that provide for a unilateral downward adjustment to taxable profits that is not reflected in the taxpayer's accounts;

(iv) rulings regarding the existence of, and attribution of profits to, a permanent establishment; and

(v) rulings in respect of cross-border flows of funds or income through a domestic entity.

What is a Ruling?

A ruling generally includes all of Revenue's taxpayer specific communications with companies and entities in respect of direct taxes, including opinions and confirmations issued on the application of tax law to particular transactions, events or activities. Advance approvals and clearances required by legislation or Revenue administrative practices and opinions issued in response to expressions of doubt or in the course of a Revenue audit may also be treated as rulings and subject to the Regime.

Retroactive Application

The extent of the Regime's retroactivity depends on whether a ruling is subject to the OECD Framework or the EU Rules. The OECD Framework applies with effect from 1 April 2016 to all relevant rulings issued or amended on or after 1 January 2010 which were still in effect on 1 January 2014. The EU Rules will apply retrospectively to relevant rulings issued or amended on or after 1 January 2012 which were still in effect on 1 January 2014 (the Irish domestic provisions implementing the EU Rules are expected to be detailed in Finance Act 2016 later this year). 1 Rulings relating to one-off transactions (eg, deferral of capital gains) within this look-back period will not be regarded as having been still in effect.

All relevant rulings issued or amended by Revenue since 1 January...

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