by Julie Martin, MNE Tax
Ireland’s government today published its Corporation Tax Roadmap, announcing plans to consider significant changes to Ireland’s international tax and transfer pricing regime and incorporate aspects of the EU Anti-Tax Avoidance Directive (ATAD) into its laws.
“This roadmap demonstrates . . . the government’s commitment to continuing the significant progress already made to strengthen Ireland’s corporation tax system now and in the years to come,” said Minister for Finance and Public Expenditure & Reform, Paschal Donohoe, introducing the plan.
Ireland transfer pricing update
Ireland intends to update its transfer pricing rules, introducing new provisions in Finance Bill 2019 that would take effect from January 1, 2020, the roadmap states. This timeline is earlier than the year-end 2020 timeline proposed in an influential 2017 consultation undertaken by commissioned expert, Seamus Coffey.
The government will launch a public consultation on the transfer pricing changes in early 2019, the roadmap said.
The roadmap notes that the Coffey report recommends that Ireland’s transfer pricing rules reflect changes made in the 2017 OECD transfer pricing guidelines and be extended to grandfathered arrangements agreed before July 1, 2010; to small and medium-sized entities; to non-trading income; and to capital transactions.
The Irish government roadmap also said that legislation would be introduced in Finance Bill 2018 to add controlled foreign company (CFC) rules with effect from January 1, 2019, to comply with the ATAD.
A majority of stakeholder responses to the Coffey consultation indicated a preference for the CFC rule’s Option B methodology, which would attribute income arising from non-genuine arrangements put in place for the essential purpose of obtaining a tax advantage to the parent company, the roadmap said.
Anti-hybrid legislation will be introduced in Finance Bill 2019, the roadmap announced. A consultation paper on these rules will be issued in the 3rd quarter of 2018. Anti-reverse hybrid legislation will be introduced in a later finance bill.
The government said it did not expect to make any significant amendments to the Irish GAAR to comply with the ATAD.
Legislation will be introduced in Finance Bill 2019 to ensure that Ireland fully implements obligations for mandatory disclosure of tax planning arrangements.