The Irish Finance Bill published on 22 October 2015 contains details of Ireland's response to Action 13 of BEPS minimum standard of country-by-country ("CBC") reporting. Whilst Action 13 is described as a "re-examination of transfer pricing documentation", CBC reporting could enable countries with relatively high tax rates to target multi-nationals with taxable profits in countries with effectively low or no tax applying to profits by amending their tax laws to target perceived avoidance, however this could be against the underlying agreed principals of BEPS. For groups inverted under an Irish tax resident parent or existing as Irish parented groups, the proposed legislation will shift the compliance burden up a gear.  The key point to note is that the Irish Revenue exchange of CBC reported information appears to be without taxpayer's consent, or indeed notification.  Failure to comply could attract penalties under Irish tax law and under the Irish Companies Act 2014.

Limited Time to Avoid

The draft legislation takes effect for fiscal years commencing on or after 1 January 2016 and will apply where the ultimate parent is tax resident in Ireland whose consolidated group turnover exceeds €750m. Hence, Irish parented groups with a 31 December year end will have less than three months to prepare for the new regime. CBC reporting will need to be reported for the year ended 31 December 2016 by 31 December 2017.

The information to be filed with Irish Revenue is consistent and follows the OECD’s CBC reporting template. In summary, the parent company will need to disclose information in tabular form as set out in Annex III of Action 13. For ease of reference, the tables are set out here.


The Irish draft legislation also provides for regulations to be prepared by the Irish Revenue Commissioners to cover;

  1. making provision for an Irish resident “surrogate parent” entity to provide a CBC report to the Irish Revenue (broadly this applies where the ultimate parent jurisdiction laws or agreement with Ireland does not oblige the ultimate parent to file a CBC report);
  2. notify the Irish Revenue of CBC reports filed with certain overseas tax authorities,
  3. make provision as to how information contained in a CBC report is to be used,
  4. make provision for preserving the confidentiality of the information contained in a CBC report.

The draft legislation gives authority to the Irish Revenue to share CBC reports with other tax or governmental authorities, provided that jurisdiction and Ireland have entered into a qualifying agreement on the exchange of information. Given Ireland has 72 double taxation agreement partners and a further 25 tax information exchange partners, this gives Irish Revenue considerable reach. There is no provision to notify the Irish parent of the proposed sharing of information or give an appeal against such sharing. It is hoped regulation may deal with this area.

Penalties for Failure to Return

A failure to make a return which would include the filing of an incorrect or incomplete return can result in a penalty of €19,045 plus €2,535 for each day on which the failure continues. Under Companies Act 2014, the directors of Irish incorporated companies are required to confirm the company's tax affairs are in compliance with Irish tax law. Clearly, if there is inadequate CBC reporting, there could be Companies Act penalties too.


As the regime commences with effect from 1 January 2016, multi-nationals with their ultimate parent (or their surrogate parent entity as the case may be) resident in Ireland will need to consider the need to provide detailed information to the Irish Revenue authorities regarding the location and nature of activities of the various group members. This invariably will lead to groups having to consider group reorganisations and rationalisations in advance of filing of their first country-by-country report. In implementing the compliance regime for CBC, boards should consider the benefit of independent legal advice that under Companies Act 2014, their systems and arrangements are designed to secure material compliance with the company's obligations.