835G Documentation and enquiries

Summary

This section sets out transfer pricing documentation requirements, including the requirement to prepare a local file and master file in certain cases.

Details

Definitions

(1) Definitions of the various terms used in the section are set out. Definitions for master file and local file are based on Annex I and II to Chapter V of the 2017 OECD Guidelines. The section provides that the ‘master file revenue threshold’ is €250 million and the ‘local file revenue threshold’ is €50 million.

Transfer pricing documentation requirements

(2) A relevant person is obliged to have available such records as may reasonably be required for the purposes of determining whether the profits or gains or losses of the relevant person have been computed in accordance with this Part.

(3)(a) A relevant person is required to prepare and have available a master file where the relevant person is part of an MNE group and the total consolidated global revenue of the MNE group is at, or above, the master file revenue threshold (€250 million) in the chargeable period.

(3)(b) A relevant person is required to prepare and have available a local file where the relevant person is part of an MNE group and the total consolidated global revenue of the MNE group is at, or above, the local file revenue threshold (€50 million) in the chargeable period.

(4) Certain arrangements entered into before 1 July 2010 are excluded from the transfer pricing documentation requirements. The exclusion applies where the supplier and the acquirer in relation to the arrangement are qualifying relevant persons (as defined in section 835E).

(5) Transfer pricing documentation must be prepared by a relevant person no later than the date on which a tax return for the chargeable period is required to be delivered and must be provided to a Revenue officer within 30 days of a request made in writing.

Penalties

(6)(a) Where a relevant person fails to comply with a request to provide transfer pricing documentation within 30 days of a written request, a fixed penalty of €4,000 will apply.

(6)(b) Where the relevant person is of such a size that the person is required to prepare a local file for the chargeable period, the fixed penalty is increased from €4,000 to €25,000 plus €100 for each day that the failure continues.

(7) A relevant person will be protected from tax-geared penalties in section 1077E(5), which relates to careless but not deliberate behaviour, in respect of additional tax due in the event of a transfer pricing adjustment in circumstances where the relevant person –

• (7)(c)(i), (ii) has fulfilled the requirements of the section to prepare, and provides upon request, transfer pricing documentation within the specified timeframe; and
• (7)(c)(iii) the records provided are accurate and demonstrate that notwithstanding the transfer pricing adjustment, the relevant person has made a reasonable effort to comply with the requirements of this Part in setting the actual consideration payable or receivable, as the case may be, under an arrangement.

(8) The general rule in section 886(3) that applies to records also applies to transfer pricing records i.e. they must be prepared in written form in an official language of the State or by means of any electronic, photographic or other process.

Relevant Date: Finance Act 2021