Transfer pricing documentation supporting an enterprise's trading income is required to be ready if requested. Such supporting documentation should be complete at the time of filing the annual tax return, but is not required to be submitted with the tax return.
The Irish tax authorities have stated that it is best practice to prepare supporting documentation at the time the terms of a transaction are set, but it is not a requirement. Documentation can be maintained in the form of an enterprise's choosing and relevant transfer pricing documentation existing in other jurisdictions will typically be accepted for cases involving Ireland as long as the documentation is in English.
While exact documentation requirements have not been issued, it is generally accepted that the documentation required will be dictated by the facts and circumstances of the transactions.
The following outlines the general information that should be included:
- Group structure
- Categories and types of related party transactions, including the terms of the transactions and related parties involved
- Transfer pricing method(s) used for each related party transaction
- Details of the comparables used and functional analysis conducted
- The basis on which it has been established that the transactions are in accordance with the arm’s length principle, as well as details of how adjustments were made if not.
- Any other budget, forecasts or other documents related to evaluating and making adjustments to ensure compliance with the arms length principle
Adherence to either OECD or EU Transfer Pricing Documentation guidelines for documentation will be accepted as good practice by the Irish tax authorities.