All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Irish Revenue reports reflect changing tides

Ireland large

The Irish Revenue Commissioners (Revenue) recently published their 2016 annual report together with an analysis of corporation tax receipts for 2015 and 2016 (the reports). The reports provide empirical evidence of the practical impact of international tax developments on taxpayers in Ireland with cross-border operations. This article, by Joe Duffy and Tomas Bailey from Matheson, provides an overview of the key trends emerging from the reports.

Ireland is increasingly being viewed as the most suitable location globally to onshore intellectual property (IP) as taxpayers reorganise group holding structures. The reports note that claims for capital allowances in respect of the amortisation of IP increased significantly between 2014 and 2015. The total value of IP amortisation claimed in 2015 was €26 billion ($30 billion).

The increase in IP onshoring confirms Ireland’s position as a leading global hub for pharmaceutical and technological based industries. The increase also reflects the real and well-established substance available in Ireland which enables multinational taxpayers to satisfy both domestic substance requirements and the revised international transfer pricing standards.

Availability of tax certainty

The reports confirm that Revenue remains committed to providing tax certainty to taxpayers involved in complex transactions. In 2016, Revenue recorded a 50% increase in the number of advance pricing agreement (APA) requests received. The introduction of a formal APA programme in 2016 has made Ireland an increasingly desirable destination for companies to initiate APA procedures.

Revenue also issued a total of 254 opinions and confirmations to taxpayers during 2016 on the interpretation and application of specific tax rules. Revenue confirmed that opinions and confirmations will continue to be available to taxpayers where required in certain circumstances.

Increased disputes and resolution

In line with international trends, tax disputes have become more commonplace in Ireland in recent years. The reports confirm that this trend continued in 2016, noting a 33% increase in the number of mutual agreement procedures (MAP) initiated during the year. However, the reports confirm Revenue’s continued commitment to efficient dispute resolution where possible. In 2016, Revenue completed negotiations to eliminate double taxation though MAP in almost 20% of its open case inventory. The reports note that Ireland will be subject to OECD peer review of its MAP procedures later this year.

The reports also provide an overview of Revenue’s audit and compliance activities during the year. In total, 40 tax cases involving alleged tax avoidance were settled during 2016, three of which related to the application of Ireland’s general anti-abuse rule. In addition, the reports confirm that Revenue’s transfer pricing audit branch currently have 12 open transfer pricing audits ongoing.

Corporate tax receipts

The reports provide an analysis of the trends in corporation tax payments for 2016, noting that all corporation tax returns for 2016 have not yet been filed. The following points are worth noting in this regard:

  • Corporation tax receipts increased by 7% to €7.35 billion in 2016;

  • Trading profits reported increased by 49% to €46 billion; and

  • The number of net corporation taxpayers increased by 10.6% to 44,149.

Interestingly, the reports note that, despite having the lowest marginal rate of corporation tax of all OECD countries, Ireland’s corporation tax yield as a percentage of GDP is equal to the OECD average and is almost 4% higher than the OECD average share of total tax yield.


The reports provide clear evidence that taxpayers with cross-border operations are responding to recent developments in international tax and increasingly see Ireland as an ideal location to grow their business operations. The reports confirm that taxpayers have confidence in Ireland’s BEPS-compliant tax offering and are enhancing the substance of their operations in Ireland as a direct result.

The increased substance in Ireland underpins the significant increase in trading profits reported in Ireland in 2016 and the continuous growth in employment figures recorded during the year. It is expected that this trend will continue over the coming years.

Joe Duffy

Joe Duffy
Partner, Matheson

Tomas Bailey

Tomas Bailey
Solicitor, Matheson

more across site & bottom lb ros

More from across our site

Several tax chiefs shared their administrations’ latest digital identity tracking systems and other tax technologies at the OECD’s annual meeting of authorities.
Businesses welcome the UK’s decision to scrap the IR35 reforms but are not happy about the time and money they have wasted to date.
Energy ministers agreed on regulations including a windfall tax on fossil fuel companies to address high gas prices at an extraordinary Council meeting on September 30.
The European Parliament raises concerns over unanimity in voting on pillar two, while protests break out over tax reform in Colombia.
Ramesh Khaitan speaks to reporter Siqalane Taho about tax morality, transfer pricing regulations, Indian tax developments, and the OECD’s two-pillar solution.
Join ITR and KPMG China at 10am BST on October 19 as they discuss the personal, employment, and corporate tax-related implications of employees working from overseas.
Tricentis and Boehringer Ingelheim, along with a European Commission TP specialist, criticised the complexity of pillar one rules and their scope at an ITR event.
Speakers at ITR’s Managing Tax Disputes Summit said taxpayers can still face lengthy TP audits, despite strong documentation preparation
Gig economy companies in New Zealand will need to fully account and become liable for the goods and services tax of underlying suppliers on their platforms, under new proposals.
Join ITR and Thomson Reuters at 2pm (UAE) / 11am (UK) on October 13 as they discuss how businesses can prepare for Tax Administration 3.0 and future-proof against changes such as e-invoicing and increasing digitisation.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree