Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 34:

In page 35, line 9, after “activities” to insert the following: “or who would be chargeable to corporation tax in respect of the profits or gains arising from the relevant activities but for section 129”.

Section 26 substitutes the existing transfer pricing legislation to update and modernise the rules in line with the Coffey review recommendations. It was recommended that consideration be given to extending the rules to cover a wider range of transactions between associated persons, including non-trading transactions. Domestic non-trading transactions involving associated persons chargeable to Irish tax in respect of the transaction will remain outside the scope of the transfer pricing rules. This was provided for to address the concerns raised in the Coffey review about the potential impact on domestic intra-group financing.

Amendment No. 34 ensures the exclusion from transfer pricing rules of domestic non-trading transactions will apply, not only where the parties to the transaction are chargeable to tax but also where they would be chargeable to tax but for the fact that dividends received from Irish companies, paid from taxed profits, are exempt from tax. The amendment ensures the exclusion will be available in respect of certain non-trading transactions involving a company the business of which consists wholly or mainly of the holding of shares in an Irish company. A failure to make this arrangement would result in the unintended consequence of bringing this type of wholly domestic arrangement into the scope of the revised transfer pricing rules.

The other amendments are minor changes, including amendments to correct a minor typographical error and a drafting oversight in section 26 of the Bill.