Key Transfer Pricing Insights from the Irish Revenue’s 2023 Annual Report
The Irish Revenue Commissioners recently made the news after publishing their Annual Report for 2023. The report provides valuable insights into the developments that happened and key achievements while highlighting high-focus areas. It gets exceedingly crucial for taxpayers in Ireland to be updated on recent happenings for understanding the updated transfer pricing compliance requirements.
In this blog post, we will outline some of the major highlights from the report and discuss how their implementation can be managed with ease.
Transfer Pricing Compliance and Audits
One of the significant aspects of the 2023 Annual Report is a constant emphasis on transfer pricing compliance and audits. As per the report, the TP audit branches have made 58 TP compliance interventions between 2015 and 2023. Of these cases, 33 were completed yielding €748m and restricting losses worth €952m.
The results depicted a downward trend in yield from TP interventions in 2023 when they were put against the numbers from 2022 and 2021. However, a yield of €71.9m from the 8 TP interventions closed in 2023 made up more than 9% of the total compliance yield achieved by revenue from 291,756 interventions completed.
This data demonstrates why companies should maintain strong transfer pricing documentation and conform to arm’s length principle. Tax payers must make an effort to assess their own transfer pricing policies, develop inclusive documentation as well as anticipate potential audits.
Country-by-Country Reporting (CbCR)
Transparency and compliance in taxation continue to be critical, so country-by-country reporting (CbCR) remains significant. Companies operating internationally which have consolidated group income of at least €750 million in the financial year prior are required to submit CbC Reports in Ireland.
It is very important for taxpayers to know the CbCR filing deadlines and ensure that they file their reports on time. The Irish Revenue has been actively exchanging CbC data with other tax authorities, with exchanges taking place with 62 other tax authorities in 2023.
Request for Transfer Pricing Documentation
Sometime in 2023, The Irish Revenue issued a new TDM on requests for transfer pricing documentation. It is a policy document that will ensure uniformity when TP documents are requested by the TP Audit Branches from taxpayers as part of risk assessment.
If asked, taxpayers must be prepared with TP documentation and it should be both accurate and complete, and comply with Irish Revenue requirements. Without proper TP documentation the fines can be very high.
Conclusion
The 2023 Annual Report by the Irish Revenue shows that it continues to concentrate on maintaining proper transfer pricing compliance and implementing country-by-country reporting, as well as stressing the importance of accurate and timely documentation. This requires taxpayers to be up-to-date with developments in this field, make use of online services such as ROS, and seek professional advice to help them negotiate through tax intricacies.
Country-by-Country reporting at DataTracks
More than 350 multinational enterprises rely on DataTracks for CbCR XML report preparation, submitted to over 20 tax authorities globally. For expert assistance in preparing accurate XML Country-by-Country reports for Irish Revenue, please contact us at enquiry@datatracks.co.uk