Ireland Explains Transfer Pricing Documentation Rules
On August 3, 2017, the Irish Revenue published Revenue e-Brief No. 74/17, which contains guidance for taxpayers on complying with Ireland’s transfer pricing documentation requirements.
The guidance notes that companies are legally required to maintain transfer pricing documentation. However, there is no requirement for documentation to be kept in a standard form. The guidance adds that the legislation does not require that the company itself must prepare the documentation or that the documentation must be in the state. If documentation is available from an associated company, which prepared it for tax purposes in another jurisdiction, it will be sufficient that that documentation can be made available to the Revenue, the guidance notes.
It is emphasized that transfer prices and related documentation should be reviewed at regular intervals to determine whether the pricing remains “arm’s length.” The guidance notes that, as a matter of best practice, the documentation must be prepared at the time the terms of the transaction are agreed.
According to the guidance, the relevant documentation must clearly identify:
- Associated persons for the purposes of the legislation;
- The nature and terms of transactions within the scope of the legislation;
- The method or methods by which the pricing of transactions were arrived at, including any study of comparables and any functional analysis undertaken;
- How that method has resulted in arm’s length pricing or, where it has not, what computational adjustment(s) were required and how these were calculated;
- Any budgets, forecasts, or other papers containing information relied on in arriving at arm’s length terms, or in calculating any adjustment made to satisfy the requirements of the new transfer pricing legislation; and
- The terms of relevant transactions with both third parties and associates.uig
