Ireland explains tax ruling practices at EU hearing

“Ireland does not have a statutory system of binding tax rulings and there is no provision in Irish law for the issuing of such rulings,” Revenue Chair Niall Cody has said, reports Tax News.

Cody made the comments during an address to a session of the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE) on May 28.

He explained that the tax authority, the Revenue Commissioners, issues non-binding advisory opinions on the application of tax law in relation to specific transactions or situations. “The provision of such opinions comes within the general administrative functions vested in Revenue under tax legislation. Opinions are only issued where the matter is complex or where there is genuine uncertainty regarding the applicable tax rules.”

According to Cody, Revenue’s role is to interpret and apply the tax law correctly and consistently. It does not have “the authority or discretion to depart from the applicable rules as set out in tax law.” Revenue opinions are not binding and can be reviewed.

Cody said that Ireland has cooperated fully with the European Commission’s state aid inquiries into tax ruling practices. He pointed out that, in the case of companies operating in Ireland through a branch, Revenue is “required to charge corporation tax on the full profits arising from their branch activities here – and that is what we do.” However, Revenue cannot “charge tax on profits arising from activities outside the state that are unrelated to the Irish branch – such profits are outside the scope of the Irish tax system.”

He pointed out that detailed guidelines on the provision of tax opinions are available on Revenue’s website, and the agency publishes a range of information on the application of tax legislation, including tax briefings and guidance notes, which are updated each year. It does not generally publish opinions on the application of the law to the specific circumstances of any one taxpayer. However, in cases that may be of more general interest, the Revenue publishes a tax briefing note that summarizes the issue raised by the taxpayer and the opinion given by Revenue.

The Irish Revenue is statutorily independent in the performance of its functions and is accountable to the Irish Parliament, he told the Committee.