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

I move amendment No. 105:

In page 33, line 21, to delete “paragraph (b)(i)” and substitute “paragraph (c)(i)”.

Section 15 updates Part 35A of the Taxes Consolidation Act 1997 which provides for transfer pricing. In particular, section 15 updates the definition of "relevant person" in section 835A and replaces section 835E, which provides for an exclusion from transfer pricing rules for certain domestic non-trading arrangements. These amendments are necessary to ensure that certain aspects of the transfer pricing legislation operate as intended. The new section 835E also provides that parties to certain domestic loan arrangements may be regarded as "qualifying relevant persons" and fall within the exclusion, provided certain conditions are satisfied.

Following publication of the Finance Bill, it became apparent that certainbona fidedomestic non-trading arrangements, which were similar in nature to qualifying loan arrangements, were not specifically provided for within the exclusion. Therefore, I am now making provision to include additional domestic non-trading arrangements within the scope of section 835E. These amendments extend the exclusion from transfer pricing rules for domestic non-trading arrangements in the following circumstances, provided certain conditions are satisfied. The first is where an individual, tax resident in the State, provides a loan to a trading company or rental company to which they are associated. The second is where a company within the charge to corporation tax or an individual within the charge to income tax, in each case as a supplier, is owed a debt by either a trading company or rental company which arose from a supply of goods, services or assets. Of note is that it is only the debt and not the arrangement or part of an arrangement that gives rise to the debt that will be excluded by this amendment. The third is where a replacement loan is used to repay a loan that previously qualified as a qualifying loan arrangement, in which case the replacement loan will be treated as having been used for the same purpose as the original loan. Of note is that the replacement loan must satisfy the other necessary conditions. The final circumstance is where intragroup debt is created between two associated companies as a result of the acquisition of ordinary shares or a subscription for ordinary shares in a trading company or rental company where all of the other necessary conditions for a qualifying loan arrangement are satisfied.

The other amendments I propose to make are minor in nature and include some updates to cross-references and other minor technical updates. I commend these amendments to the committee. I am considering a Report Stage amendment with respect to this section.