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Advance pricing agreements
Availability and eligibility
Are advance pricing agreements with the tax authorities in your jurisdiction possible? If so, what form do they typically take (eg, unilateral, bilateral or multilateral) and what enterprises and transactions can they cover?
Ireland has introduced a formal bilateral advanced pricing agreement programme and published guidelines in September 2016.
The bilateral advance pricing agreement programme is intended to apply only in respect of transactions where the transfer pricing issues involved are complex. The following types of company can apply for a bilateral advance pricing agreement:
- companies that are tax residents in Ireland for the purposes of a relevant double taxation agreement; and
- permanent establishments of non-resident companies in accordance with the provisions of the relevant double taxation agreement.
Where the relevant issues involve more than two tax jurisdictions, Irish Revenue will consider entering into a series of bilateral advance pricing agreements to deal with multilateral situations. Ireland will not enter into unilateral advance pricing agreements. There must be a double taxation agreement in place in order for a bilateral advance pricing agreement application to be considered and the process is conducted under the mutual agreement procedure of the relevant double taxation agreement.
Rules and procedures
What rules and procedures apply to advance pricing agreements?
Ireland's advance pricing agreement programme adheres to the detailed guidelines for concluding such agreements contained in Annex to Chapter IV: Advance Pricing Arrangements of the Transfer Pricing Guidelines. When negotiating a bilateral advance pricing agreement with an EU member state, Irish Revenue will also adhere to the best practices for the conduct of such procedures as set out in the Guidelines for Advance Pricing Agreements within the European Union, which have been published by the EU Joint Transfer Pricing Forum.
Transparency is fundamental to Ireland's advance pricing agreement programme. All bilateral agreements are negotiated on the basis of identifying an arm's-length remuneration for the transactions covered by the agreement using any of the transfer pricing methodologies contained in the Transfer Pricing Guidelines.
The advance pricing agreement process itself is conducted over a number of stages:
- Pre-filing – contact with Irish Revenue and informal discussions;
- Formal advance pricing agreement application;
- Evaluation of the application and negotiation of the agreement;
- Formal agreement; and
- Annual reporting.
How long does it typically take to conclude an advance pricing agreement?
Irish Revenue will endeavour to conclude advance pricing agreement cases within 24 months of the formal agreement application from the taxpayer.
What is the typical duration of an advance pricing agreement?
An advance pricing agreement will generally be granted for a fixed period, typically between three and five years (excluding any roll-back years).
What fees apply to requests for advance pricing agreements?
Ireland does not charge any fees in respect of advance pricing agreement applications.
Are there any special considerations or issues specific to your jurisdiction that parties should bear in mind when seeking to conclude an advance pricing agreement (including any particular advantages and disadvantages)?
From January 1 2017 Directive (EU) 2015/2376 on the mandatory automatic exchange of information will apply and Irish Revenue will be obliged to exchange automatically certain information in relation to advance pricing agreements with other EU member states, and to inform the European Commission of that information. In addition, certain basic information will have to be provided in relation to advance pricing agreements with non-EU jurisdictions.
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