{"id":21851,"date":"2023-07-15T21:46:15","date_gmt":"2023-07-15T21:46:15","guid":{"rendered":"https:\/\/legalblog.ie\/?p=21851"},"modified":"2024-04-06T21:24:45","modified_gmt":"2024-04-06T21:24:45","slug":"transfer-pricing","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/transfer-pricing\/","title":{"rendered":"Transfer Pricing"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#Updated_Provisions\" title=\"Updated Provisions\">Updated Provisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#Pre-2010_Arrangements\" title=\"Pre-2010 Arrangements\">Pre-2010 Arrangements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#S110_Companies\" title=\"S.110 Companies\">S.110 Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#Extension_of_Scope_2020\" title=\"Extension of Scope 2020\">Extension of Scope 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#Extension_of_Scope_2021\" title=\"Extension of Scope 2021\">Extension of Scope 2021<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/#OECD_Guidelines\" title=\"OECD Guidelines\">OECD Guidelines<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Transfer_Pricing_ss_835A-835HB\" title=\"Transfer Pricing (ss. 835A-835HB)\">Transfer Pricing (ss. 835A-835HB)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Interpretation\" title=\"Interpretation.\">Interpretation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Basic_rules_on_transfer_pricing\" title=\"Basic rules on transfer pricing.\">Basic rules on transfer pricing.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Principles_for_construing_rules_in_accordance_with_OECD_Guidelines\" title=\"Principles for construing rules in accordance with OECD Guidelines.\">Principles for construing rules in accordance with OECD Guidelines.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Modification_of_basic_rules_on_transfer_pricing_for_arrangements_between_qualifying_persons\" title=\"Modification of basic rules on transfer pricing for arrangements between qualifying persons\">Modification of basic rules on transfer pricing for arrangements between qualifying persons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Small_or_medium-sized_enterprise\" title=\"Small or medium-sized enterprise.\">Small or medium-sized enterprise.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Small_or_medium-sized_enterprise-2\" title=\"Small or medium-sized enterprise.\">Small or medium-sized enterprise.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Documentation_and_enquiries\" title=\"Documentation and enquiries.\">Documentation and enquiries.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Elimination_of_double_counting\" title=\"Elimination of double counting.\">Elimination of double counting.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Interaction_with_capital_allowances_provisions\" title=\"Interaction with capital allowances provisions.\">Interaction with capital allowances provisions.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/transfer-pricing\/2\/#Interaction_with_provisions_dealing_with_chargeable_gains\" title=\"Interaction with provisions dealing with chargeable gains.\">Interaction with provisions dealing with chargeable gains.<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Updated_Provisions\"><\/span>Updated Provisions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2019 substitutes a new Part 35A of the Taxes Consolidation Act 1997 for the existing Part 35A (Transfer Pricing). The existing Part 35A sets out transfer pricing rules that apply the arm\u2019s length principle to trading transactions between associated persons. The new Part 35A updates existing transfer pricing rules and extends their scope and application.<\/p>\n<p>The new Part 35A makes the following changes\u2014<\/p>\n<ul>\n<li>It extends, subject to certain exceptions, the application of the arm\u2019s length principle to the computation of non-trading income, capital allowances and chargeable gains relating to transactions between associated persons.<\/li>\n<li>There is an exclusion from the application of transfer pricing rules to the computation of non-trading income where it relates to a transaction between certain associated persons who are chargeable to tax in the State on the profits or gains or losses arising from the transaction.<\/li>\n<li>In relation to the computation of capital allowances and chargeable gains, transfer pricing rules will only apply in respect of transactions relating to assets that have a market value of over \u20ac25 million.<\/li>\n<li>It updates the rules to require that \u201carm\u2019s length\u201d be construed as far as practicable in accordance with the 2017 version of the OECD Transfer Pricing Guidelines. The rules previously referred to the 2010 version of the OECD Transfer Pricing Guidelines.<\/li>\n<li>It enhances transfer pricing documentation requirements, including requiring companies that are members of larger groups to prepare, and to provide to the Revenue Commissioners upon request, a local file and a master file in line with Annex I and II of Chapter V of the 2017 OECD Transfer Pricing Guidelines.<\/li>\n<li>It provides for a higher rate of penalty for larger taxpayers who fail to comply with a request to provide transfer pricing documentation to the Revenue Commissioners.<\/li>\n<li>To encourage full and timely compliance with transfer pricing documentation requirements, it provides for protection from tax-geared penalties, in the careless behaviour category, where a taxpayer prepares transfer pricing documentation and provides it to the Revenue Commissioners on a timely basis and the documentation demonstrates reasonable efforts to comply with transfer pricing legislation.<\/li>\n<\/ul>\n<p>The updated transfer pricing rules apply for chargeable periods commencing on or after 1 January 2020 and, in respect of claims for capital\u00a0allowances, where the related capital expenditure is incurred on or after 1 January 2020.<\/p>\n<p>Small and medium enterprises are to come within the scope of transfer pricing rules in the future on the making of an order by the Minister.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pre-2010_Arrangements\"><\/span>Pre-2010 Arrangements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2019 removes, with effect for chargeable periods commencing on or after 1 January 2020, the existing exclusion from transfer pricing rules that applies for arrangements that were entered into before 1 July 2010.<\/p>\n<p>It\u00a0 also provides for the removal of the exclusion from transfer pricing rules that currently applies for small and medium enterprises but sets out that these enterprises will either be fully exempt from transfer pricing documentation requirements or will have significantly reduced transfer pricing documentation requirements.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"S110_Companies\"><\/span>S.110 Companies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2019 amends section 110 of the Taxes Consolidation Act 1997 which deals with the taxation of securitisation companies. Revised transfer pricing rules are being introduced in Finance Act 2019, however the profit participating note in section 110 companies cannot be made subject to the new transfer pricing rules without introducing a direct conflict in legislation.<\/p>\n<p>They are therefore being carved out from transfer pricing rules, but additional anti-avoidance provisions are being introduced in the Act in tandem with this provision in order to strengthen the existing protections against abuse of the regime. These amendments broaden the definition of a specified person to increase the number structures that will be subject to section 110 anti-avoidance provisions. The amendments also place the tax avoidance main purpose test on an objective basis.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Extension_of_Scope_2020\"><\/span>Extension of Scope 2020<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2020 provides for two amendments to Part 35A (Transfer Pricing) of the Taxes Consolidation Act 1997. The purpose of these amendments is to ensure that certain aspects of the transfer pricing legislation operate as intended.<\/p>\n<p>The definition of \u2018relevant person\u2019 is amended to ensure that, in relation to an arrangement, a supplier or acquirer, whose profits or gains or losses within the charge to tax would take account of any results of the arrangement, will be regarded as a \u2018relevant person\u2019 for the purposes of documentation requirements.<\/p>\n<p>There is an amended definition of \u2018qualifying relevant person\u2019 to clarify that a relevant person must have profits or gains or losses chargeable to tax under Schedule D, the computation of which directly takes account of the actual results of the arrangement. In addition, the definition is amended to clarify when a party to certain loan arrangements will be regarded as a \u2018qualifying relevant person\u2019.<\/p>\n<p>Finance Act 2020 \u00a0sets out the circumstances in which profits or gains or losses will be regarded as \u201ctaking account of the actual results of an arrangement\u201d. These amendments apply for chargeable periods commencing on or after 1 January 2021.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Extension_of_Scope_2021\"><\/span>Extension of Scope 2021<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2021\u00a0 provides for amendments to Part 35A (Transfer Pricing) of the Taxes Consolidation Act 1997. These amendments apply for chargeable periods commencing on or after 1 January 2022.<\/p>\n<p>The definition of \u2018relevant person\u2019 is amended to ensure that, in relation to an arrangement, a supplier or acquirer, whose profits or gains or losses within the charge to tax would take account of any results of the arrangement, will be regarded as a \u2018relevant person\u2019.<\/p>\n<p>The 2021 Act provides for an exclusion from the application of transfer pricing rules to the computation of non-trading income in certain circumstances. Provided certain conditions are satisfied, the exclusion will apply in respect of a transaction between certain associated persons who are both chargeable to tax in the State on the profits or gains or losses arising from the transaction, or who would be so chargeable if there were any.<\/p>\n<p>Where the supplier meets this requirement but the acquirer does not, the exclusion will only apply where the acquirer is chargeable to tax on any profits or gains or losses arising from its relevant activities, or would be so chargeable if there were any, and is resident in the State.<br \/>\nContains anti-avoidance provisions to ensure the section operates as intended.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"OECD_Guidelines\"><\/span>OECD Guidelines<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2022, by updating the definition of \u201ctransfer pricing guideline, updates the transfer pricing rules to be construed, as far as practicable, in accordance with the 2022 version of the OECD Transfer Pricing Guidelines.<\/p>\n<p>The rules previously referred to the 2017 version of the OECD Transfer Pricing Guidelines.This applies to chargeable periods commencing on or after 1 January 2023.<\/p>\n<p><!--nextpage--><\/p>\n<p>Part 35A<\/p>\n<h4>Transfer Pricing (ss. 835A-835HB)<\/h4>\n<p>835A.<\/p>\n<h4>Interpretation.<\/h4>\n<p>(1)In this Part &#8211;<\/p>\n<p>&#8220;arrangement&#8221; means &#8211;<br \/>\n(a)any transaction, action, course of action, course of conduct, scheme or plan,<br \/>\n(b)any agreement, arrangement of any kind, understanding, promise or undertaking, whether express or implied and whether or not it is, or is intended to be, legally enforceable, or<br \/>\n(c)any series of or combination of the circumstances referred to in paragraphs (a) and (b);<\/p>\n<p>&#8220;chargeable asset&#8221; in relation to a person, means an asset which, if it were disposed of by the person, the gain accruing to the person would be a chargeable gain;<\/p>\n<p>&#8220;chargeable period&#8221; has the same meaning as in section 321(2);<\/p>\n<p>&#8220;Commission Recommendation&#8221; means Commission Recommendation 2003\/361\/EC of 6 May 2003 [OJ No. L124, 20.05.2003, p.36] concerning the definition of micro, small and medium-sized enterprises;<\/p>\n<p>&#8220;double taxation relief arrangements&#8221; means arrangements having effect by virtue of section 826;<\/p>\n<p>&#8220;group&#8221; (other than in the definition of &#8216;transfer pricing guidelines&#8217; in section 835D(1)) means a company which has one or more 75 per cent subsidiaries together with those subsidiaries;<\/p>\n<p>&#8220;relevant activities&#8221; in relation to a person who is one of the persons between whom an arrangement is made, means that person&#8217;s activities which comprise the activities in the course of which, or with respect to which, that arrangement is made and shall include activities involving the disposal and acquisition of an asset or assets;<\/p>\n<p>&#8220;relevant person&#8221; in relation to an arrangement, means a person who is within the charge to tax in respect of profits or gains or losses, the computation of which profits or gains or losses takes account of the results of the arrangement, or would take account of the results of such an arrangement;<\/p>\n<p>&#8220;Revenue officer&#8221; means an officer of the Revenue Commissioners;<\/p>\n<p>&#8220;tax&#8221; means income tax, corporation tax or capital gains tax.<\/p>\n<p>(2)References in this Part to &#8216;control&#8217;, in relation to a company, shall be construed in accordance with section 11.<\/p>\n<p>(3)For the purposes of this Part, references to losses that are chargeable to tax are references to losses arising from an arrangement or relevant activities, a profit or gain arising from which would be chargeable to tax.<\/p>\n<p>835B. Meaning of associated.<br \/>\n(1)For the purposes of this Part &#8211;<\/p>\n<p>(a)2 persons are associated at any time if at that time &#8211;<\/p>\n<p>(i)one of the persons is participating in the management, control or capital of the other, or<\/p>\n<p>(ii)the same person is participating in the management, control or capital of each of the 2 persons,<\/p>\n<p>and<\/p>\n<p>(b)a person (in this paragraph referred to as the &#8216;first person&#8217;) is participating in the management, control or capital of another person at any time only if that other person is at that time &#8211;<\/p>\n<p>(i)a company, and<\/p>\n<p>(ii)controlled by the first person.<\/p>\n<p>(2)<\/p>\n<p>(a)For the purposes of this section a company shall be treated as controlled by an individual if it is controlled by the individual and persons connected with the individual.<\/p>\n<p>(b)For the purposes of this subsection a person is connected with an individual if that person is a relative (within the meaning of section 433(3)(a)) of that individual.<\/p>\n<p>835C.<\/p>\n<h4>Basic rules on transfer pricing.<\/h4>\n<p>(1)Subject to this Part, this section applies to any arrangement &#8211;<\/p>\n<p>(a)involving the supply and acquisition of goods, services, money, assets (including intangible assets) or anything else of commercial value,<\/p>\n<p>(b)where, at the time of the supply and acquisition, the person making the supply (in this Part referred to as the &#8216;supplier&#8217;) and the person making the acquisition (in this Part referred to as the &#8216;acquirer&#8217;) are associated, and<\/p>\n<p>(c)the profits or gains or losses arising from the relevant activities are within the charge to tax in the case of either the supplier or the acquirer or both.<\/p>\n<p>(2)<\/p>\n<p>(a)If the amount of the consideration payable (in this Part referred to as the &#8216;actual consideration payable&#8217;) for an acquisition under any arrangement to which this section applies exceeds the arm&#8217;s length amount, then the profits or gains or losses of the acquirer that are chargeable to tax shall be computed as if the arm&#8217;s length amount were payable instead of the actual consideration payable.<\/p>\n<p>(b)If the amount of the consideration receivable (in this Part referred to as the &#8216;actual consideration receivable&#8217;) for a supply under any arrangement to which this section applies is less than the arm&#8217;s length amount, then the profits or gains or losses of the supplier that are chargeable to tax shall be computed as if the arm&#8217;s length amount were receivable instead of the actual consideration receivable.<\/p>\n<p>(3)In this section the &#8216;arm&#8217;s length amount&#8217; of consideration for a supply and acquisition under an arrangement refers to the amount of consideration that independent parties dealing at arm&#8217;s length would have agreed in relation to the supply and acquisition and subsections (4) and (5) shall apply for the purposes of determining the amount of that consideration.<\/p>\n<p>(4)The arm&#8217;s length amount of consideration for a supply and acquisition under an arrangement shall be determined by &#8211;<\/p>\n<p>(a)identifying the actual commercial or financial relations between the supplier and the acquirer and the conditions and economically relevant circumstances attaching to those relations (the &#8216;identified arrangement&#8217;), and<\/p>\n<p>(b)applying the transfer pricing method set out in the transfer pricing guidelines (as defined in section 835D) that is, in the circumstances, the most appropriate so as to determine the arm&#8217;s length amount of consideration for the identified arrangement.<\/p>\n<p>(5)For the purposes of subsection (4)(a) &#8211;<\/p>\n<p>(a)the identified arrangement shall be based on the substance of the commercial or financial relations between the supplier and the acquirer where the form of the arrangement is inconsistent with the substance of those relations,<\/p>\n<p>(b)if the identified arrangement, viewed in its totality, differs from that which would have been adopted by independent parties behaving in a commercially rational manner in comparable circumstances then, pursuant to the principles set out in Chapter I, D.2 of the transfer pricing guidelines, the identified arrangement shall be &#8211;<\/p>\n<p>(i)disregarded (and, for the purposes of subsection (2)(a), the profits or gains or losses that are chargeable to tax of a relevant person who is an acquirer in relation to that disregarded arrangement, shall be computed as if, instead of the actual consideration payable under the arrangement, no consideration were payable), or<\/p>\n<p>(ii)replaced by an alternative arrangement that achieves a commercially rational expected result (and such replacement alternative arrangement shall be regarded as the identified arrangement accordingly).<\/p>\n<p>(6)The reference to a supply or acquisition of an asset in subsection (1)(a) shall, in relation to a chargeable asset, include a disposal or acquisition, as the case may be, of the chargeable asset and, without prejudice to the generality of the foregoing, any reference in section 835HB to a disposal of a chargeable asset shall for the purposes of this Part be construed as being a reference to a supply of the asset.<\/p>\n<p>(7)Where the actual consideration payable under an arrangement exceeds the arm&#8217;s length amount and any amount of that excess is treated as a distribution under any provision of the Tax Acts, then for the purposes of computing the amount of profits or gains or losses of the acquirer that are chargeable to tax under Schedule D, subsection (2)(a) shall apply as if the reference in that subsection to the actual consideration payable were a reference to an amount equal to the actual consideration payable less the amount treated as a distribution and the references to the actual consideration payable by the first-mentioned person in subsections (1)(a) and (3) of section 835H shall be construed accordingly.<\/p>\n<p>(8)This section shall not apply to an arrangement involving a sale or transfer of trading stock to which section 89(4) applies.<\/p>\n<p>835D.<\/p>\n<h4>Principles for construing rules in accordance with OECD Guidelines.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;Article 9(1) of the OECD Model Tax Convention&#8217; means the provisions which, at the date of the passing of the Finance Act 2019, were contained in Article 9(1) of the Model Tax Convention on Income and Capital published by the OECD;<\/p>\n<p>&#8216;OECD&#8217; means the Organisation for Economic Cooperation and Development;<\/p>\n<p>&#8216;transfer pricing guidelines&#8217; means the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations published by the OECD on 20 January 2022 supplemented by such additional guidance, published by the OECD on or after the date of passing of the Finance Act 2022, as may be designated by the Minister for Finance for the purposes of this Part by order made under subsection (3).<\/p>\n<p>(2)For the purpose of computing profits or gains or losses chargeable to tax, this Part shall be construed to ensure, as far as practicable, consistency between &#8211;<\/p>\n<p>(a)the effect which is to be given to section 835C, and<\/p>\n<p>(b)the effect which, in accordance with the transfer pricing guidelines, would be given if double taxation relief arrangements incorporating Article 9(1) of the OECD Model Tax Convention applied to the computation of the profits or gains or losses, regardless of whether such double taxation relief arrangements actually apply,<\/p>\n<p>but this section shall not apply for the purposes of construing this Part to the extent that such application of the section would be contrary to the provisions of double taxation relief arrangements that apply to the computation of those profits or gains or losses.<\/p>\n<p>(3)The Minister for Finance may, for the purposes of this Part, by order designate any additional guidance referred to in the definition of &#8216;transfer pricing guidelines&#8217; in subsection (1) as being comprised in the transfer pricing guidelines.<\/p>\n<p>(4)Every order made by the Minister for Finance under subsection (3) shall be laid before D\u00e1il \u00c9ireann as soon as may be after it is made and, if a resolution annulling the order is passed by D\u00e1il \u00c9ireann within the next 21 days on which D\u00e1il \u00c9ireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.<\/p>\n<p>835E.<\/p>\n<h4>Modification of basic rules on transfer pricing for arrangements between qualifying persons<\/h4>\n<p>(1)For the purposes of this Part, a &#8216;qualifying person&#8217;, in relation to a chargeable period, means a person who &#8211;<\/p>\n<p>(a)subject to paragraph (b) &#8211;<\/p>\n<p>(i)is a supplier in relation to an arrangement and who for that chargeable period is chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, in respect of the profits or gains or losses arising from that arrangement, or<\/p>\n<p>(ii)is an acquirer in relation to an arrangement and who for that chargeable period is chargeable to income tax or corporation tax under Schedule D in respect of the profits or gains or losses arising from that arrangement,<\/p>\n<p>(b)is resident in the State for the purposes of income tax for that chargeable period where the supplier or the acquirer is chargeable to income tax in respect of the profits or gains or losses arising from that arrangement, and<\/p>\n<p>(c)is not a qualifying company within the meaning of section 110.<\/p>\n<p>(2)<\/p>\n<p>(a)For the purposes of subsection (1)(a)(i), a supplier shall, for the chargeable period, be regarded as chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, in respect of the profits or gains or losses arising from the arrangement concerned only where the consideration receivable by the supplier under that arrangement &#8211;<\/p>\n<p>(i)is directly taken into account in computing the amount of profits or gains or losses of the supplier that are chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, for the chargeable period, or<\/p>\n<p>(ii)would be so taken into account if any consideration were receivable by the supplier under the arrangement.<\/p>\n<p>(b)<\/p>\n<p>(i)For the purposes of subsection (1)(a)(ii), an acquirer shall, subject to subparagraph (ii), for the chargeable period, be regarded as chargeable to income tax or corporation tax under Schedule D, in respect of the profits or gains or losses arising from the arrangement concerned only where the consideration payable by the acquirer under that arrangement &#8211;<\/p>\n<p>(I)is directly taken into account in computing the amount of profits or gains or losses of the acquirer that are chargeable to income tax or corporation tax under Schedule D for the chargeable period, or<\/p>\n<p>(II)would be so taken into account if any consideration were payable by the acquirer under the arrangement.<\/p>\n<p>(ii)For the purposes of subsection (1)(a)(ii), in the case of an acquirer to whom subparagraph (i) does not apply, the acquirer shall, for the chargeable period, be regarded as chargeable to &#8211;<\/p>\n<p>(I)income tax under Schedule D in respect of the profits or gains or losses arising from the arrangement concerned where any profits or gains or losses of the acquirer arising directly or indirectly from the relevant activities of the acquirer are or, if there were any such profits or gains or losses, would be, chargeable to income tax under Schedule D for the chargeable period, or<\/p>\n<p>(II)corporation tax under Schedule D, in respect of the profits or gains or losses arising from the arrangement concerned, where any profits or gains or losses of the acquirer arising directly or indirectly from the relevant activities of the acquirer are or, if there were any such profits or gains or losses, would be, chargeable to corporation tax under Schedule D for the chargeable period, or would be chargeable to corporation tax but for section 129, and the acquirer is resident in the State for the chargeable period.<\/p>\n<p>(3)Subject to subsections (6) to (8), where &#8211;<\/p>\n<p>(a)a supplier or an acquirer, in relation to an arrangement, is chargeable to tax for a chargeable period, under Schedule D, other than under Case I or II of Schedule D, in respect of the profits or gains or losses arising from that arrangement (in this section referred to as the &#8216;eligible person&#8217;), and<\/p>\n<p>(b)the supplier and the acquirer are both qualifying persons, in relation to that arrangement, for the chargeable period of the eligible person,<\/p>\n<p>then, section 835C shall not apply in computing the amount of profits or gains or losses arising to the eligible person from the arrangement for the chargeable period.<\/p>\n<p>(4)For the purposes of subsection (3)(a) &#8211;<\/p>\n<p>(a)a supplier shall, for the chargeable period, be regarded as chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, in respect of profits or gains or losses arising from the arrangement concerned only where the consideration receivable by the supplier under that arrangement &#8211;<\/p>\n<p>(i)is directly taken into account in computing the amount of profits or gains or losses of the supplier that are chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, for the chargeable period, or<\/p>\n<p>(ii)would be so taken into account if any consideration were receivable by the supplier under the arrangement,<\/p>\n<p>and<\/p>\n<p>(b)an acquirer shall, for the chargeable period, be regarded as chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, in respect of profits or gains or losses arising from the arrangement concerned only where the consideration payable under that arrangement &#8211;<\/p>\n<p>(i)is directly taken into account in computing the amount of profits or gains or losses of the acquirer that are chargeable to income tax or corporation tax under Schedule D, other than under Case I or II of Schedule D, for the chargeable period, or<\/p>\n<p>(ii)would be so taken into account if any consideration were payable by the acquirer under the arrangement.<\/p>\n<p>(5)For the purposes of subsection (3)(b) &#8211;<\/p>\n<p>(a)where the supplier is the eligible person, the acquirer shall be a qualifying person only where the acquirer is a qualifying person for the duration of the chargeable period of the supplier, and<\/p>\n<p>(b)where the acquirer is the eligible person, the supplier shall be a qualifying person only where the supplier is a qualifying person for the duration of the chargeable period of the acquirer.<\/p>\n<p>(6)<\/p>\n<p>(a)Subsection (3) shall only apply to an arrangement where the arrangement is entered into for bona fide commercial reasons.<\/p>\n<p>(b)Subsection (3) shall not apply to an arrangement where the main purpose, or one of the main purposes, of the arrangement is the avoidance of tax.<\/p>\n<p>(7)<\/p>\n<p>(a)Subsection (3) shall not apply in the case of an arrangement, where, due to the existence of the arrangement, an amount, which is greater than the actual consideration payable by the acquirer under the arrangement, may &#8211;<\/p>\n<p>(i)be taken into account as an expenditure or expense,<\/p>\n<p>(ii)be taken into account in determining allowances for capital expenditure which may be made, or<\/p>\n<p>(iii)otherwise be deducted, allowed or relieved,<\/p>\n<p>in computing the profits or gains, of the acquirer, on which tax falls finally to be borne for the purposes of domestic tax or foreign tax.<\/p>\n<p>(b)For the purpose of this subsection, &#8216;domestic tax&#8217; and &#8216;foreign tax&#8217; have the same meaning as in section 835Z(1).<\/p>\n<p>(8)<\/p>\n<p>(a)Subsection (3) shall not apply in the case of an arrangement involving a supplier and an acquirer who are qualifying persons (in this subsection referred to as the &#8216;first-mentioned arrangement&#8217;) which is made as part of, or in connection with, any scheme involving the acquirer in relation to the first-mentioned arrangement, or a person associated with the acquirer, entering into an arrangement with a person or persons who are not qualifying persons (in this subsection referred to as the &#8216;second-mentioned arrangement&#8217;) and the sole or main purpose of the first-mentioned arrangement is to directly or indirectly obtain a tax advantage in connection with the second-mentioned arrangement.<\/p>\n<p>(b)For the purpose of this subsection, &#8216;tax advantage&#8217; has the same meaning as in section 811C(1).<\/p>\n<p>(9)A qualifying person shall maintain and have available such records as may reasonably be required for the purposes of determining whether the requirements of this section are met.<\/p>\n<p>835EA.<\/p>\n<h4>Small or medium-sized enterprise.<\/h4>\n<p>(1)This Part does not apply in computing for any chargeable period the profits or gains or losses of a person if that person is a small or medium-sized enterprise for that chargeable period.<\/p>\n<p>(2)For the purposes of this section &#8216;small or medium-sized enterprise&#8217; means an enterprise which would fall within the category of micro, small and medium-sized enterprises as defined in the Annex to the Commission Recommendation (in this section referred to as the &#8216;Annex&#8217;) if &#8211;<\/p>\n<p>(a)in the case of an enterprise which is in liquidation or administration, the rights of the liquidator or administrator (in that capacity) were left out of account when applying Article 3(3)(b) of the Annex in determining for the purposes of this Part whether &#8211;<\/p>\n<p>(i)that enterprise, or<\/p>\n<p>(ii)any other enterprise (including that of the liquidator or administrator),<\/p>\n<p>is a small or medium-sized enterprise,<\/p>\n<p>(b)Article 3 of the Annex had effect with the omission of paragraph 5 of that Article,<\/p>\n<p>(c)the first sentence of Article 4(1) of the Annex had effect as if the data to apply to &#8211;<\/p>\n<p>(i)the headcount of staff, and<\/p>\n<p>(ii)the financial amounts,<\/p>\n<p>were the data relating to the chargeable period referred to in subsection (1) (instead of the period described in the said first sentence of Article 4(1) of the Annex) and calculated on an annual basis, and<\/p>\n<p>(d)Article 4 of the Annex had effect with the omission of the following provisions &#8211;<\/p>\n<p>(i)the second sentence of paragraph 1 of that Article,<\/p>\n<p>(ii)paragraph 2 of that Article, and<\/p>\n<p>(iii)paragraph 3 of that Article.<\/p>\n<p>835F.<\/p>\n<h4>Small or medium-sized enterprise.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>&#8216;Annex&#8217; means the Annex to the Commission Recommendation;<\/p>\n<p>&#8216;medium enterprise&#8217; means an enterprise which &#8211;<\/p>\n<p>(a)falls within the category of micro, small and medium-sized enterprises as defined in the Annex, and<\/p>\n<p>(b)is not a small enterprise as defined in the Annex;<\/p>\n<p>&#8216;small enterprise&#8217; means a small enterprise as defined in the Annex.<\/p>\n<p>(2)For the purposes of subsection (1), the Annex shall have effect as if &#8211;<\/p>\n<p>(a)in the case of an enterprise which is in liquidation or to which an examiner has been appointed under Part 10 of the Companies Act 2014, the rights of the liquidator or examiner (in that capacity) were left out of account when applying Article 3(3)(b) of the Annex in determining for the purposes of this Part whether &#8211;<\/p>\n<p>(i)that enterprise, or<\/p>\n<p>(ii)any other enterprise (including that of the liquidator or examiner),<\/p>\n<p>is a small or medium-sized enterprise,<\/p>\n<p>(b)Article 3 of the Annex had effect with the omission of paragraph 5 of that Article,<\/p>\n<p>(c)the first sentence of Article 4(1) of the Annex had effect as if the data to apply to &#8211;<\/p>\n<p>(i)the headcount of staff, and<\/p>\n<p>(ii)the financial amounts,<\/p>\n<p>were the data relating to the chargeable period of the enterprise concerned (instead of the period described in the said first sentence of Article 4(1) of the Annex) and calculated on an annual basis, and<\/p>\n<p>(d)Article 4 of the Annex had effect with the omission of the following provisions &#8211;<\/p>\n<p>(i)the second sentence of paragraph 1 of that Article,<\/p>\n<p>(ii)paragraph 2 of that Article, and<\/p>\n<p>(iii)paragraph 3 of that Article.<\/p>\n<p>(3)Section 835G shall not apply to a relevant person in a chargeable period if that person is a small enterprise for that chargeable period.<\/p>\n<p>(4)Section 835G shall apply to a relevant person who is a medium enterprise in a chargeable period only in respect of a relevant arrangement.<\/p>\n<p>(5)For the purposes of subsection (4), a relevant arrangement is an arrangement involving a relevant person who is a medium enterprise and &#8211;<\/p>\n<p>(a)in a case where the profits or gains or losses arising to the medium enterprise from the relevant activities are within the charge to tax under Schedule D &#8211;<\/p>\n<p>(i)the other party to the arrangement is not a qualifying person, and<\/p>\n<p>(ii)the aggregate consideration accruing to, or payable by, the medium enterprise under the arrangement in the chargeable period exceeds \u20ac1 million,<\/p>\n<p>or<\/p>\n<p>(b)in a case where the arrangement involves the supply or acquisition of an asset, which constitutes a disposal or acquisition, as the case may be, of a chargeable asset for the purposes of the Capital Gains Tax Acts or corporation tax on chargeable gains &#8211;<\/p>\n<p>(i)the other party to the arrangement (referred to in this paragraph as the &#8216;other person&#8217;) is not resident for the purposes of tax in the State and &#8211;<\/p>\n<p>(I)where an asset is supplied to the other person under the arrangement, the asset is not, immediately after its acquisition by that other person, a chargeable asset, or<\/p>\n<p>(II)where an asset is acquired from the other person under the arrangement, the asset was not, immediately prior to its acquisition by the medium enterprise, a chargeable asset in relation to that other person,<\/p>\n<p>and<\/p>\n<p>(ii)the market value of the asset disposed of or acquired, as the case may be, exceeds \u20ac25 million.<\/p>\n<p>(6)Where section 835G applies to a relevant person who is a medium enterprise, for the purposes of subsection (2) of that section, the medium enterprise shall be required to provide the following information &#8211;<\/p>\n<p>(a)a description of the business of the medium enterprise, including its organisational structure, business strategy and key competitors, and<\/p>\n<p>(b)in relation to each relevant arrangement &#8211;<\/p>\n<p>(i)a copy of all relevant agreements,<\/p>\n<p>(ii)a description of the transfer pricing method used and the reasons the method was selected, along with evidence to support the price selected as being the arm&#8217;s length amount,<\/p>\n<p>(iii)the amount of consideration payable or receivable, as the case may be, under the arrangement, and<\/p>\n<p>(iv)a description of the functions performed, risk assumed and assets employed.<\/p>\n<p>835G.<\/p>\n<h4>Documentation and enquiries.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;constituent entity&#8217;, &#8216;fiscal year&#8217; and &#8216;MNE group&#8217; have the same meanings as in section 891H but, as respects the application of the definition of &#8216;MNE Group&#8217; in Article 1 of the OECD model legislation (as defined in section 891H) for the purpose of this section, that definition shall apply as if the words &#8220;and (ii) is not an Excluded MNE Group&#8221; were deleted therefrom;<\/p>\n<p>&#8216;local file&#8217; means a report containing the information specified in Annex II to Chapter V of the transfer pricing guidelines;<\/p>\n<p>&#8216;local file revenue threshold&#8217; means \u20ac50 million;<\/p>\n<p>&#8216;master file&#8217; means a report containing the information specified in Annex I to Chapter V of the transfer pricing guidelines;<\/p>\n<p>&#8216;master file revenue threshold&#8217; means \u20ac250 million;<\/p>\n<p>&#8216;relevant period&#8217; means, in relation to a relevant person who is a constituent entity of an MNE group, the fiscal year of the MNE group that corresponds to the chargeable period of the relevant person and, if a fiscal year of the MNE group does not exactly correspond with the chargeable period of the relevant person, the fiscal year of the MNE group that substantially coincides with the chargeable period of a relevant person.<\/p>\n<p>(2)A relevant person in relation to an arrangement to which section 835C(1) applies, and who is chargeable to tax in respect of the profits or gains or losses arising from the relevant activities, shall have available and, upon a request made in writing by a Revenue officer, shall provide such records as may reasonably be required for the purposes of determining whether, in relation to the arrangement, the profits or gains or losses of the person that are chargeable to tax have been computed in accordance with this Part.<\/p>\n<p>(3)The records referred to in subsection (2) shall include &#8211;<\/p>\n<p>(a)a master file where the relevant person is a constituent entity of an MNE group and the total revenue of the MNE group in the relevant period is at, or above, the master file revenue threshold,<\/p>\n<p>(b)a local file where the relevant person is a constituent entity of an MNE group and the total revenue of the MNE group in the relevant period is at, or above, the local file revenue threshold.<\/p>\n<p>(4)Subsection (2) shall not apply in the case of an arrangement all the terms of which were agreed before 1 July 2010, and which have not changed on or after that date, where, in relation to the arrangement, the supplier and the acquirer are qualifying persons.<\/p>\n<p>(5)<\/p>\n<p>(a)The records referred to in subsections (2) and (3) shall be prepared no later than the date on which a return for the chargeable period concerned is required to be delivered.<\/p>\n<p>(b)Where a Revenue officer makes a request in writing under subsection (2), the relevant person shall provide the records referred to in subsections (2) and (3) to the Revenue Commissioners within 30 days from the date of the request.<\/p>\n<p>(6)<\/p>\n<p>(a)Where a relevant person fails to comply with a requirement to furnish information to a Revenue officer in accordance with subsection (5)(b), the person shall be liable to a penalty of \u20ac4,000, but this is subject to paragraph (b).<\/p>\n<p>(b)Where the relevant person is a person who falls within subsection (3)(b), the penalty specified in paragraph (a) shall be \u20ac25,000 and, if the failure referred to in that paragraph, on the part of that person, continues, that person shall be liable to a further penalty of \u20ac100 for each day on which the failure continues.<\/p>\n<p>(7)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8216;return&#8217; and &#8216;specified return date for the chargeable period&#8217; have the same meanings as in section 959A;<\/p>\n<p>&#8216;transfer pricing adjustment&#8217; means any increase in the profits or gains included in a return delivered by a relevant person on or before the specified return date for the chargeable period because, by virtue of section 835C, the profits or gains or losses of a relevant person that are chargeable to tax are computed as if, instead of the actual consideration payable or receivable under an arrangement, the arm&#8217;s length amount were payable or receivable, as the case may be.<\/p>\n<p>(b)Where the conditions set out in paragraph (c) are met, a transfer pricing adjustment shall not be taken into account in determining whether a penalty referred to in section 1077E(5) or 1077F(2)(d), as appropriate, applies to the relevant person for a chargeable period or in computing the amount of any such penalty.<\/p>\n<p>(c)The conditions referred to in paragraph (b) are &#8211;<\/p>\n<p>(i)the relevant person has, for the chargeable period, prepared the records referred to in subsection (2), and where applicable subsection (3), within the time specified in subsection (5)(a),<\/p>\n<p>(ii)the relevant person provides the records referred to in subparagraph (i) to a Revenue officer within the time specified in subsection (5)(b), and<\/p>\n<p>(iii)the records referred to in subparagraph (i) are complete and accurate and demonstrate that, notwithstanding the transfer pricing adjustment, the relevant person has made reasonable efforts to comply with this Part in determining the amount of the actual consideration payable or the actual consideration receivable, as the case may be, under the arrangement.<\/p>\n<p>(8)Subsection (3) of section 886 shall apply to the records referred to in subsections (2) and (3) as it applies to records required by that section.<\/p>\n<p>835H.<\/p>\n<h4>Elimination of double counting.<\/h4>\n<p>(1)Where &#8211;<\/p>\n<p>(a)the profits or gains or losses of a person (in this section referred to as the &#8216;first-mentioned person&#8217;), that are chargeable to tax under Schedule D, are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm&#8217;s length amount in relation to that arrangement were payable or receivable as the case may be, and<\/p>\n<p>(b)the other party (in this section referred to as the &#8216;affected person&#8217;) to the arrangement is within the charge to tax under Schedule D in respect of the profits or gains or losses arising from the relevant activities,<\/p>\n<p>then, subject to subsections (2) and (3), on the making of a claim by the affected person, the profits or gains or losses of the affected person arising from the relevant activities that are chargeable to tax under Schedule D shall be computed as if, instead of the actual consideration receivable or payable by the affected person under the terms of the arrangement, the arm&#8217;s length amount (determined in accordance with section 835C) in relation to that arrangement were receivable or payable, as the case may be.<\/p>\n<p>(2)<\/p>\n<p>(a)Subsection (1) shall not affect the credits to be brought into account by the affected person in respect of closing trading stocks, for any chargeable period.<\/p>\n<p>(b)For the purposes of this subsection &#8216;trading stock&#8217;, in relation to a trade, has the same meaning as it has for the purposes of section 89.<\/p>\n<p>(3)Subsection (1) shall not apply in relation to an arrangement unless and until any tax due and payable by the first-mentioned person for the chargeable period, in respect of which the profits or gains or losses are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm&#8217;s length amount in relation to that arrangement were payable or receivable, as the case may be, has been paid.<\/p>\n<p>(4)Where the profits or gains of an affected person are reduced by virtue of subsection (1) then the amount of foreign tax (if any) for which relief may be given under any double taxation relief arrangements or paragraph 9DA or 9FA of Schedule 24 shall be reduced by the amount of foreign tax which would not be or have become payable if, for the purposes of that tax, instead of the actual consideration payable or receivable under the terms of any arrangement to which subsection (1) applies, the arm&#8217;s length amount (determined in accordance with section 835C) in relation to that arrangement were payable or receivable by the affected person as the case may be.<\/p>\n<p>(5)<\/p>\n<p>(a)Where, in relation to an arrangement &#8211;<\/p>\n<p>(i)the persons, who apart from this paragraph would be the affected person and the first-mentioned person, are members of the same group,<\/p>\n<p>(ii)the arrangement is comprised of activities within the meaning of paragraph (a) of the definition of &#8216;excepted operations&#8217; in section 21A, and<\/p>\n<p>(iii)the persons referred to in subparagraph (i) jointly elect that this section shall apply,<\/p>\n<p>then section 835C and this section shall not apply in relation to that arrangement.<\/p>\n<p>(b)An election under paragraph (a)(iii) shall be made by notice in writing to the Revenue officer on or before the specified return date for the chargeable period (within the meaning of section 959A) for the chargeable period of the person who, apart from paragraph (a), would be the first-mentioned person, and the notice shall set out the facts necessary to show that the persons referred to in paragraph (a)(i) are entitled to make the election.<\/p>\n<p>(6)Any adjustments required to be made by virtue of this section may be made by the making of, or the amendment of, an assessment.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>835HA.<\/p>\n<h4>Interaction with capital allowances provisions.<\/h4>\n<p>(1)Section 835C shall not apply in computing the amount of &#8211;<\/p>\n<p>(a)any allowances to be made to the acquirer under the provisions of the Tax Acts in respect of capital expenditure incurred on an asset where the total amount of capital expenditure incurred on the asset does not exceed \u20ac25 million,<\/p>\n<p>(b)any allowances to be made to the acquirer in respect of capital expenditure incurred on a specified intangible asset to which section 291A applies in circumstances where, under section 288(3C), the amount of that expenditure is deemed, for the purposes of Chapters 2 and 4 of Part 9, to be the amount of expenditure still unallowed on the specified intangible asset,<\/p>\n<p>(c)any balancing allowance or balancing charge to be made to, or on, the supplier of an asset under the provisions of the Tax Acts where at the time of the event giving rise to the balancing allowance or balancing charge, as the case may be, the market value of the asset does not exceed \u20ac25 million, or<\/p>\n<p>(d)any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset, or any balancing allowance or balancing charge to be made to, or on, the supplier in respect of the supply of that asset, in circumstances where &#8211;<\/p>\n<p>(i)the acquirer and supplier make a joint election under &#8211;<\/p>\n<p>(I)section 289(6), or<\/p>\n<p>(II)section 312(5)(a),<\/p>\n<p>(ii)the supply and acquisition of the asset occurs as part of the transfer of the whole or part of a trade to which &#8211;<\/p>\n<p>(I)section 308A(3),<\/p>\n<p>(II)section 310(3),<\/p>\n<p>(III)section 400(6),<\/p>\n<p>(IV)section 631(2), or<\/p>\n<p>(V)section 670(12), applies,<\/p>\n<p>(iii)the supply and acquisition of the asset occurs in the course of a merger to which section 633A applies,<\/p>\n<p>(iv)the supply and acquisition is of an interest in farm land to which section 658(9) applies,<\/p>\n<p>(v)the supply and acquisition of the asset occurs in the course of a conversion of a building society to a company, to which paragraph 1 of Schedule 16 applies, or<\/p>\n<p>(vi)the supply and acquisition of the asset occurs in the course of a transfer, to which paragraph 2 of Schedule 17 applies, from a trustee savings bank to a successor company.<\/p>\n<p>(2)<\/p>\n<p>(a)In determining whether, for the purposes of subsection (1)(a), the capital expenditure incurred on an asset (referred to in this paragraph as the &#8216;first-mentioned asset&#8217;) exceeds \u20ac25 million (referred to in this paragraph and paragraph (b) as the &#8216;\u20ac25 million threshold&#8217;), there shall be added to the capital expenditure incurred on that asset any capital expenditure incurred on another asset where &#8211;<\/p>\n<p>(i)that other asset had, at any time, formed part of the same asset as the first-mentioned asset, and<\/p>\n<p>(ii)as part of a scheme to avoid reaching the \u20ac25 million threshold in relation to the first-mentioned asset and the other asset, was acquired by the acquirer under a separate arrangement.<\/p>\n<p>(b)In determining whether, for the purposes of subsection (1)(c), the market value of an asset (referred to in this paragraph as the &#8216;first-mentioned asset&#8217;) exceeds the \u20ac25 million threshold, there shall be added to the market value of that asset the market value of any other asset which &#8211;<\/p>\n<p>(i)had at any time formed part of the same asset as the first-mentioned asset, and<\/p>\n<p>(ii)as part of a scheme to avoid reaching the \u20ac25 million threshold in relation to the first-mentioned asset and the other asset, was supplied by the supplier under a separate arrangement.<\/p>\n<p>(3)Where section 835C applies in computing any deductions or additions to be made to the acquirer or supplier of an asset, as the case may be, in respect of allowances and charges relating to capital expenditure on an asset &#8211;<\/p>\n<p>(a)subject to subsection (4), this Part shall apply notwithstanding any provision in Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B as to the computation of allowances or charges relating to capital expenditure, and<\/p>\n<p>(b)the amount of any balancing charge to be made on the supplier of an asset shall not exceed the amount of capital expenditure incurred by the supplier on that asset.<\/p>\n<p>(4)Section 835C shall not apply instead of any other provision of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B if its application would result in the amount of &#8211;<\/p>\n<p>(a)any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset being higher, or<\/p>\n<p>(b)any balancing allowance to be made to a supplier arising from the supply of an asset being higher, or<\/p>\n<p>(c)any balancing charge to be made on a supplier arising from the supply of an asset being lower,<\/p>\n<p>than would be the case under the provision or provisions concerned of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B.<\/p>\n<p>(5)Where, subject to this section, section 835C applies in computing the amount of any allowances to be made to an acquirer in respect of capital expenditure incurred on a specified intangible asset (within the meaning of section 291A), section 291A(3) shall, in each chargeable period, apply with any necessary modifications to give effect to section 835C(2)(a).<\/p>\n<p>835HB.<\/p>\n<h4>Interaction with provisions dealing with chargeable gains.<\/h4>\n<p>(1)Subject to this section, section 835C shall apply for the purposes of computing &#8211;<\/p>\n<p>(a)the amount of any chargeable gain or allowable loss arising to a supplier on the supply of an asset under an arrangement to which section 835C applies which, for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset, and<\/p>\n<p>(b)in the case of an acquirer of an asset under an arrangement to which section 835C applies, the amount of any consideration for the acquisition of the asset which is taken into account in determining the amount of any gain arising to the person on a subsequent supply of the asset, which for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset.<\/p>\n<p>(2)Section 835C shall not apply in computing the amount of any chargeable gain or allowable loss arising to a supplier on the disposal of a chargeable asset under an arrangement where &#8211;<\/p>\n<p>(a)the market value of the asset does not exceed \u20ac25 million,<\/p>\n<p>(b)the asset is disposed of in circumstances where it is treated for the purposes of corporation tax on chargeable gains or capital gains tax, under &#8211;<\/p>\n<p>(i)section 615(2),<\/p>\n<p>(ii)section 617(1),<\/p>\n<p>(iii)section 632(1),<\/p>\n<p>(iv)section 633,<\/p>\n<p>(v)section 633A,<\/p>\n<p>(vi)section 702(2), or<\/p>\n<p>(vii)paragraph 5(2) of Schedule 17,<\/p>\n<p>as having been acquired for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the person making the disposal,<\/p>\n<p>(c)the asset is transferred in the course of a conversion of a building society into a successor company to which paragraph 3(1) of Schedule 16 applies,<\/p>\n<p>(d)section 606(2) applies in relation to the disposal of the asset, or<\/p>\n<p>(e)the asset is disposed of by a person who is an individual to a company and, immediately after its acquisition by the company, the asset is a chargeable asset in relation to that company.<\/p>\n<p>(3)Section 835C shall not apply for the purpose of determining the amount of any consideration for the acquisition of a chargeable asset by an acquirer where &#8211;<\/p>\n<p>(a)the market value of the chargeable asset acquired does not exceed \u20ac25 million, or<\/p>\n<p>(b)for the purposes of corporation tax on chargeable gains or capital gains tax, under &#8211;<\/p>\n<p>(i)any of the provisions mentioned in subparagraphs (i) to (vi) of subsection (2)(b) or paragraph 5(3) of Schedule 17, or<\/p>\n<p>(ii)section 631(3),<\/p>\n<p>the acquirer is treated as if the acquisition of the asset by the person making the disposal had been the acquirer&#8217;s acquisition of the asset.<\/p>\n<p>(4)In determining whether, for the purposes of subsection (2)(a) or (3)(a), the market value of an asset (referred to in this subsection as the &#8216;first-mentioned asset&#8217;) exceeds \u20ac25 million (referred to in this subsection as the &#8216;\u20ac25 million threshold&#8217;), there shall be added to the market value of that asset the market value of any other asset which &#8211;<\/p>\n<p>(a)had at any time formed part of the same asset as the first-mentioned asset, and<\/p>\n<p>(b)as part of a scheme to avoid reaching the \u20ac25 million threshold in relation to the first-mentioned asset and the other asset, was supplied or acquired by the supplier and acquirer, as the case may be, under a separate arrangement.<\/p>\n<p>(5)<\/p>\n<p>(a)Where &#8211;<\/p>\n<p>(i)the gain of a supplier chargeable to tax in relation to the disposal of a chargeable asset is, by virtue of section 835C, computed as if, instead of the actual consideration receivable for the disposal under an arrangement, the arm&#8217;s length amount were receivable, and<\/p>\n<p>(ii)the asset is, in relation to the acquirer under the arrangement, a chargeable asset,<\/p>\n<p>then the acquirer shall be treated as having acquired the asset for a consideration equal to the arm&#8217;s length amount.<\/p>\n<p>(b)Paragraph (a) shall not apply in relation to an arrangement unless and until any tax due and payable for the chargeable period by the supplier mentioned in paragraph (a)(i) in respect of the disposal, the gain on which was, by virtue of section 835C, computed as if, instead of the actual consideration receivable under the terms of the arrangement, the arm&#8217;s length amount were receivable, has been paid.<\/p>\n<p>(6)<\/p>\n<p>(a)Where section 835C applies in computing the amount of any chargeable gain or allowable loss arising to the supplier on a disposal of a chargeable asset under an arrangement, or in treating the acquirer as having acquired an asset under an arrangement for a consideration equal to the arm&#8217;s length amount then, subject to paragraph (b), this Part shall apply notwithstanding any other provision of Part 19, 20 or 22 or Schedule 14 as to the computation of chargeable gains and allowable losses.<\/p>\n<p>(b)Section 835C shall not apply instead of any other provision of Part 19, 20 or 22 or Schedule 14 &#8211;<\/p>\n<p>(i)if its application would result &#8211;<\/p>\n<p>(I)in the amount of any chargeable gain arising to the supplier on a disposal of a chargeable asset under an arrangement being lower, or<\/p>\n<p>(II)the amount of any allowable loss arising to the supplier on a disposal referred to in clause (I) being higher,<\/p>\n<p>or<\/p>\n<p>(ii)if, by virtue of its application, the acquirer would be treated as having acquired an asset under an arrangement for a consideration that is higher,<\/p>\n<p>than would be the case under the provision or provisions concerned of Part 19, 20 or 22 or Schedule 14.<\/p>\n<p>P<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-21851\" data-postid=\"21851\" class=\"themify_builder_content themify_builder_content-21851 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Updated Provisions Finance Act 2019 substitutes a new Part 35A of the Taxes Consolidation Act 1997 for the existing Part 35A (Transfer Pricing). The existing Part 35A sets out transfer pricing rules that apply the arm\u2019s length principle to trading transactions between associated persons. The new Part 35A updates existing transfer pricing rules and extends [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[383],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21851"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=21851"}],"version-history":[{"count":17,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21851\/revisions"}],"predecessor-version":[{"id":34846,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21851\/revisions\/34846"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=21851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=21851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=21851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}