Transfer Pricing For The International Practitioner

Author:Ms Catherine O'Meara

Legislation (e.g., new legislation or regulations that have impacted the transfer pricing landscape in your country.)

The Irish Finance Bill 2018 (the ''2018 Bill'') introduced a legislative amendment with respect to the application of domestic time limits under the Mutual Agreement Procedure (''MAP''). Section 57 of the 2018 Bill amends section 959AA of the Taxes Consolidation Act 1997 (''TCA'') which provides for time limits on assessments made or amended by a Revenue Officer. This provision should come into force once the Bill is enacted, i.e., before the end of 2018. When seeking MAP assistance with regard to adjustments made to previous financial years, in circumstances where the Double Taxation Agreement (''DTA'') remains silent as to the time limit for when a request for MAP assistance is to be brought, the OECD Model Tax Convention on Income and on Capital (''OECD MTC'') allows contracting states to the DTA to be able to apply domestic time limits. This essentially allows contracting states to regulate how long or when a taxpayer can bring a claim.

In Ireland, under section 865(4) TCA, a claim for MAP adjustment must be made within 4 years after the end of the chargeable period to which the claim relates. ''Chargeable period'' is defined under section 321(2) TCA as an accounting period in the case of a company. The effect of section 57 of the 2018 Bill ultimately allows for the making and amending of assessments outside the four-year time limit in the case of bilateral MAPs reached between the competent authority of Ireland and the competent authority of another jurisdiction with which Ireland has a DTA. As a consequence of section 57 of the 2018 Bill, any time limits that apply or restrict the availability of MAP to a taxpayer are ultimately removed.

According to the Explanatory Memorandum to the 2018 Bill, the amendment provided by section 57 serves the purpose of ensuring that Ireland implements and follows the standards agreed to under the OECD BEPS initiative. However, as the amendment only applies to bilateral MAPs, unilateral forms of relief (such as correlative relief) do not benefit from the amendment. Furthermore, this extension to reopen tax years outside the four-year limit is only available to Irish Revenue and an equivalent right is not available to Irish taxpayers.

As detailed below, it is anticipated that further legislative changes will be introduced in the short term affecting Ireland's transfer pricing regime.

Cases and Rulings (e.g., recent transfer pricing cases or rulings, as well as changes in the volume or types of transfer pricing cases being...

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