New APA regime announced for Ireland

Ireland has accepted and concluded bilateral APAs for many years although there have been no formal procedures to initiate an APA in Ireland. However, in light of comments made by an Irish Revenue official at the Global Tax Policy Conference held in Dublin earlier this month, it appears that such a programme in Ireland is imminent.

More than 30 countries operate formal APA programmes. These programmes increase taxpayer certainty, which will be increasingly important in the post-BEPS environment. 

The Irish Revenue Commissioners accept requests to enter into bilateral APA discussions with treaty partner countries on a case-by-case basis, in situations where the other country has accepted the APA negotiation request. Generally, these cases are considered complex or are likely to result in a mutual agreement procedure (MAP) request pursuant to Ireland’s treaty network.

The process is governed by the rules or guidelines of the treaty partner country due to the fact that Ireland does not have any rules in place. Ireland adheres to the EU and OECD published guidance regarding transfer pricing and APAs for all bilateral APA negotiations with treaty partner countries. Ireland will only enter into bilateral APAs, and there is no unilateral APA programme in operation. 

Details regarding the new bilateral APA programme in Ireland are expected to be published during 2016. The programme will likely provide for APAs lasting between three and five years and may be retrospective in effect. It is also expected that no fees will be payable to the Irish Revenue Commissioners for an APA application.

It is unclear precisely how the proposed programme will be introduced in Ireland. It could be introduced through the means of administrative guidance and operating procedures published by the Irish Revenue Commissioners. Alternatively, a formal APA programme may be incorporated into legislation and the OECD has issued guidance to assist countries drafting APA legislation.

From an Irish perspective, the introduction of a formal APA programme is a welcome development which will enhance Ireland’s reputation as a location for foreign direct investment and further demonstrate that Ireland does not encourage base erosion and profit-shifting. 

This article was prepared by Joe Duffy and Kathryn Stapleton of Matheson.

Joe Duffy, Partner Joseph.Duffy@matheson.com

Kathryn Stapleton, Associate Kathryn.Stapleton@matheson.com

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