Ireland updates mutual agreement procedure guidelines for tax disputes

The Irish Revenue Department on December 23 published updated guidelines for requesting mutual agreement procedure (MAP) assistance for resolving cross-border tax and transfer pricing disputes. The updates incorporate a 2017 EU directive on tax dispute resolution mechanisms in the EU, among other changes.

The EU dispute resolution directive, which took effect July 1, 2019, provides a mechanism for resolving tax disputes between EU member states that arise from the interpretation of a tax treaty or the EU Arbitration Convention with respect to income or capital earned on or after January 1, 2018. The mechanism may also apply to earlier tax years with agreement of the relevant competent authorities.

The updated guidelines state that if a taxpayer submits a MAP request under the EU dispute resolution mechanism, ongoing MAP proceedings under a tax treaty or EU Arbitration Convention will cease. Taxpayers must make such requests under the EU mechanism within three years of the first notification of the action giving rise to the dispute. To be considered valid, the requests must include certain specified information, which is outlined in appendix 2 of the updated guidelines.

The Irish competent authority may reject MAP requests under the EU dispute resolution mechanism if the requests do not contain the required information. Decisions to accept or reject a request shall generally be made within six months. If accepted, the competent authorities involved will seek to resolve the dispute within two years, with a possible one-year extension.

In addition to incorporating guidance on the EU dispute resolution mechanism, the updated guidelines have also been amended to reflect 1997 tax legislation enabling the collection of disputed tax to be suspended when a taxpayer makes a MAP request within 30 days of the date of the notice of the corresponding assessment and has paid any undisputed tax amounts.

The updates further remove previously included guidance on correlative adjustment claims, which have been set out in a separate standalone tax manual.