TP Compliance requirements in Ireland

The current position in relation to Master File, Local File and CbCR requirements are as follows:

The Master File

• Requirements/thresholds: where an Irish taxpayer forms part of MNE group and the total consolidated global revenue of the MNE group is at, or above, EUR 250 million, a Master File must be prepared and available
• Submission deadline: no later than the date on which the tax return for the chargeable period is due to be filed. The obligation to prepare a Master File annually on the corporate tax return is to be disclosed.
• Fixed penalties and tax penalties can apply in relation to any TP adjustment that ultimately arises from the incorrect implementation of TP policy.

The Local File

• Where an Irish taxpayer forms part of a MNE group and the total consolidated global revenue of the MNE group is at, or above, EUR 50 million, a Local File is to be prepared and be available.
• Escape clause: for small or medium-sized enterprises (“the SME exemption”). To fall within the SME exemption, the enterprise must have
   

› less than 250 employees; and either

› revenue not exceeding EUR 50 million; or

› total assets not exceeding EUR 43 million.
 

• Every Irish entity must prepare a Local File. Companies are allowed to prepare a consolidated ‘Country File’ for all Irish entities of an MNE group.
• The Country File will contain essentially the same content as a Local File. However, it must also include entity-level qualitative and financial information. Where financial information is consolidated in the country file, companies will not be treated as having complied with their TP obligations.
• Submission deadline: no later than the corporation tax filing date. The taxpayer must disclose the obligation to prepare a Master File on the corporate tax return.
• If the taxpayer is obliged to prepare documentation and fails to provide documentation within 30 days of request, the fine will be EUR 25,000 plus EUR 100 per day thereafter.

Country by Country Reporting (CbCR)

• The CbCR according to BEPS Action 13 was implemented for FYs from 2016 onwards.
• Threshold: ultimate parent entity of the MNE group is located in Ireland and generated an annual consolidated group revenue of at least EUR 750 million in the previous year.
• Deadline for preparation and submission: within 12 months after the end of the reporting FY.
• Surrogate filing: implemented.
• Secondary filing: implemented.
• Duty of notification: yes, before the end of the FY.
• Penalties:
• EUR 19,045 will apply for not filing or incorrectly filing the CbCR plus EUR 2,535 for every late day thereafter.
• Ireland is a signatory of the Multilateral Competent Authority Agreement on the Exchange of CbCR.
• OECD XML format for submission has been implemented.

TP developments in 2022

The Finance Act 2021 (applying from 1 January 2022) provides that the OECD approach to attribution of branch profits of non-resident companies is to be implemented. Non-trading transactions (in certain circumstances) between associated periods which are both within the charge for Irish tax remain exempt from TP considerations. It further clarifies that there does not need to be consideration for the exemption to apply.

The OECD approach to branch and permanent establishments is now required. Exemptions are in place where profits are less than EUR 250,000, however in the absence of this exemption the documentary requirements regarding compliance must be strictly observed.

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