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Transfer Pricing: Contemporaneous documentation requirements in Ireland

23 March, 2021

Finance Act 2019 (FA) introduced radical changes to the Irish transfer pricing (TP) legislation. The new requirements apply to accounting periods commencing on or after 1 January 2020.

One of the key changes introduced is the enhanced contemporaneous TP documentation requirements. There is a need to have a Master File (MF) and Local File (LF) in place. A penalty regime to promote compliance has been introduced.

Irish taxpayers within scope of the enhanced TP documentation requirements will be expected to prepare and finalise their TP documentation for financial year (FY) 2020 by the filing of the FY2020 annual corporation tax return. For companies with a 31 December year end, that due date will be 23 September 2021. Taxpayers need to start planning now and thinking about the next steps to ensure timely compliance. 

Please listen to our webinars for a detailed discussion on the key legislative changes and on the TP guidance recently published by the Irish Revenue.

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Key Insights

The enhanced TP documentation requirements are summarised below. 


Taxpayers that exceed the following de minimis thresholds will be required to prepare a group MF and/or LF reports for each Irish entity involved in intercompany transactions (subject to some limited exceptions) for accounting periods commencing on or after 1 January 2020.

  • MF must be prepared where consolidated group revenues are EUR 250 million or more; and
  • LF must be prepared where consolidated group revenues are EUR 50 million or more.

Where the de minimis threshold for the MF/ LF is not met, taxpayers should still maintain documentation to demonstrate that the intercompany transactions are undertaken on an arm’s length basis (however the documentation requirements are less prescriptive).

Please note that small and medium sized enterprises (SMEs) are excluded from the scope of the Irish TP rules. The definition of an SME is assessed at group level and is based on the definition of SME's in the EU Commission Recommendation of 6 May 2003. A SME is an enterprise that, on a group basis, employs fewer than 250 employees and which has an annual turnover not exceeding €50 million and/or annual total assets not exceeding €43 million.

Changes to Corporation Tax Return (CT1) Form

The CT1 form for FY2020 has now been updated to include the following mandatory questions. Taxpayer responses to these questions inform Revenue of their TP documentation obligations for FY2020. 

  • Does the company qualify for the SME exemption under section 835EA? Yes/ No
  • Is the company required to prepare a Local File, tick the box? Yes/ No
  • Is the company required to prepare a Master File, tick the box? Yes/ No

Scope of intercompany transactions

FA 2019 has broadened the scope of the Irish TP rules. Consequently the following intercompany transactions will need to be documented:

  • Trading transactions
  • Non-trading transactions, with certain exclusions
  • Capital transactions exceeding market value of EUR 25 million. Capital transactions below the threshold will continue to be subject to existing market value rules. 
  • Intercompany transactions the terms of which were agreed before 1 July 2010 that were formerly “grandfathered” and therefore outside the scope of TP. FA 2019 has now brought these previously grandfathered transactions within the scope of TP, with certain exclusions. 

Content of MF/ LF

The content of the MF and LF reports are broadly aligned to the 2017 OECD Guidance which are also endorsed within the Irish TP legislation. However, there are some local nuances covered in the TP guidance recently issued by Irish Revenue that taxpayers need to comply with. The guidance also comments on the documentation needed for entities below the LF threshold. 

Our fourth webinar covers the key highlights of the guidance issued by the Irish Revenue.


The TP documentation (MF and LF); 

  • should be prepared no later than the due date of filing the corporate tax return; and 
  • must be submitted to the Irish Revenue within 30 days of a written request.


A fixed penalty regime as summarised below has been introduced to ensure compliance with contemporaneous TP documentation requirements. Failure to submit TP documentation within 30 days of request by the Irish Revenue leads to the following penalties:.

  • Penalty of EUR 25,000 plus EUR 100 per day of continuing default for MF and/or LF 
  • Penalty of EUR 4,000 for taxpayers that do not satisfy the MF/ LF threshold 

Further, a penalty protection regime has been introduced to encourage taxpayers to comply with the contemporaneous TP documentation requirements. Taxpayers can avail of protection from tax-geared penalties in the event of a TP adjustment that fall within the careless behaviour category of default if the following conditions are satisfied:

  • Prepare contemporaneous TP documentation by the due date of submitting the tax return;
  • Submit such contemporaneous TP documentation within 30 days of request by the Irish Revenue; and 
  • The records provided are accurate and demonstrate that the taxpayer has made reasonable efforts to comply with the requirements of the Irish TP legislation

What does this mean for you?

Review whether MF/ LF threshold are met 

The thresholds specified for MF and LF are relatively low, being based on group revenues. Taxpayers should therefore review whether they meet these requirements and start planning now to ensure sufficient time to prepare the relevant documentation ahead of filing the corporation tax return.

Where the de minimis threshold for the MF/ LF is not met (but the company is not an SME), taxpayers still need to maintain documentation to demonstrate the arm’s length nature of intercompany transactions. However, the requirements are less prescriptive.   

Detailed review of the intercompany transactions to identify transactions within the scope of the expanded Irish TP legislation

Taxpayers are recommended to:

  • Perform a detailed review of intercompany transactions to identify transactions that fall within scope of FY2020 Irish TP documentation (particularly given the expansion of the Irish TP legislation). 
  • Analyse the applicability of certain limited exclusions (eg, domestic intercompany transactions exclusions). It is important to note that there are no exclusions based on transaction values except for capital transactions mentioned above. 
  • To the extent the identified transactions have not been priced/supported by reference to the arm’s length principle, the pricing of the same would need to be analysed for FY2020 TP documentation.

Timely compliance for penalty protection

Taxpayers need to prepare TP documentation no later than the date on which the tax return is due to be filed i.e. 23 September 2021 for taxpayers with 31 December 2020 year end.  

Taxpayers should start planning now in relation to FY2020 and developing an appropriate strategy for ensuring full and timely compliance with the TP documentation requirements on an annual basis, in order to mitigate the penalty for non compliance, and also avail of penalty protection in the event of a TP adjustment.

Given the additional compliance burden for large groups where multiple LFs will be required, leveraging technology would be key for efficiency. Click here for a short video of PwC’s TP documentation technology tool.

We are here to help you

Our transfer pricing group has extensive experience in assisting, leading and coordinating domestic and international TP projects across all industries. Our team comprises professionals from countries where the TP documentation regime has been in place for some time, and know how to manage the issues involved in ensuring compliance with it.

We use the power of our local experts together with PwC's global network to provide our clients with the best solutions. If you would like to know more, contact us today to discuss how we can assist you through the new TP documentation compliance cycle.

Contact us

Ronan Finn

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6105

Gavan Ryle

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 8704

Aoife Harrison

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 5537

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