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Transfer Pricing in Ireland
Ireland modernised its transfer pricing regime with the Finance Act 2019, which implemented comprehensive TP rules aligned with the OECD 2017 Transfer Pricing Guidelines. Prior to 2019, Ireland had limited TP rules that only applied to trading transactions. The modernised regime, codified in Part 35A of the Taxes Consolidation Act 1997 (TCA 1997), applies the arm's length principle to all arrangements between associated enterprises, including domestic transactions (a significant expansion from the prior regime). Ireland follows OECD Guidelines and uses the standard interquartile range (25th–75th percentile).
Ireland's importance as a headquarters, IP holding, and shared services hub for multinational groups — particularly in technology, pharmaceutical, and financial services — makes transfer pricing a critical issue. Irish Revenue has increased its focus on transfer pricing compliance, particularly for entities that act as principal entities, IP holders, or financing vehicles within multinational groups. The substance requirements are paramount: Irish entities must have adequate personnel, decision-making authority, and operational presence to justify the profits allocated to them. The abolition of the 'double Irish' structure (2015, fully phased out by 2020) and the introduction of the Knowledge Development Box (KDB) at a reduced 6.25% rate have changed the IP landscape, but transfer pricing remains central to Ireland's attractiveness as a holding jurisdiction.
Finance Act 2021 further updated Ireland's TP rules to reflect the OECD 2022 Transfer Pricing Guidelines, including updated guidance on financial transactions (Chapter X). Irish Revenue now requires Master File, Local File, and CbCR documentation broadly in line with OECD Chapter V. SMEs (companies meeting the EU SME criteria) are exempt from formal documentation requirements but remain subject to the arm's length principle — they should still maintain sufficient records to demonstrate arm's length pricing. Ireland's bilateral APA programme is available, and Irish Revenue participates in MAP procedures under Ireland's extensive double tax treaty network.
Ireland TP Quick Reference
Common TP Audit Triggers in Ireland
Irish entity acting as principal or IP holder with limited substance
Significant royalty payments into or out of Ireland
KDB claims — Revenue scrutinises the underlying TP allocation
Irish entity margins inconsistent with functions and risks
CbCR data showing profit concentration in Ireland without commensurate substance
Intercompany financing arrangements with Irish group finance entities
Ireland vs. OECD Guidelines: Key Differences
Ireland follows OECD Guidelines closely. Key features: (1) Finance Act 2019/2021 modernised regime aligned with OECD 2017/2022 Guidelines; (2) domestic transactions in scope from 2020; (3) SME exemption from formal documentation; (4) emphasis on substance for IP holding entities; (5) KDB interaction with TP at 6.25% rate; (6) active bilateral APA programme.