Ireland Details Framework On Exchange Of Tax Rulings

The Irish Revenue has released guidance on how it will exchange information on the tax rulings it grants.

Revenue eBrief No.65/16, which was released on July 5, 2016, sets out Revenue’s arrangements for implementing Council Directive (EU) 2015/2376; and the OECD’s framework for the compulsory spontaneous exchange of information in respect of rulings that was adopted as part of Action 5 of the base erosion and profit shifting project.

The guidance states that the requirements apply to taxpayer-specific communications that Revenue provides to companies and other entities in respect of direct taxes that come within the definition of an advance cross-border ruling or an advance pricing agreement as provided for by the Directive, or that come within the categories of rulings stipulated in the OECD framework. The requirements outlined in the Directive and OECD framework are not mutually exclusive and a Revenue communication may fall within both, the guidance notes.

According to the guidance, taxpayer-specific communications include the opinions that Revenue provides on the application of tax law to particular transactions, events, or activities. Where such opinions come within scope of the exchange of information requirements provided for in the Directive or the OECD framework, Revenue will be exchanging the necessary information with other tax administrations.

The guidance confirms that Revenue will be exchanging information on relevant opinions with affected countries in line with the OECD framework from April 1, 2016. Similarly, from January 1, 2017, Revenue will be exchanging information on relevant opinions with all other EU member states and a subset of this information will also be communicated to the European Commission. Revenue will also exchange information on relevant past opinions that it has provided.

Under both the EU Directive and the OECD framework, Revenue will exchange the following information:

• The identity of the taxpayer to whom the opinion was issued;
• The name of the group to which the taxpayer belongs, where appropriate;
• The opinion reference number, if any;
• The date the opinion was issued, amended, or renewed. The start date and end date of the period of validity of the opinion, if specified;
• An indication of the type of opinion being exchanged;
• The amount of the transaction or transactions to which the ruling relate(s), if specified;
• A summary of the content of the opinion; and
• Details of the taxpayer’s main business activities, its annual turnover, and its net profit or loss will also be provided, if available.

The guidance notes that from April 1, 2016, where a taxpayer, or a tax practitioner acting on their behalf, seeks an opinion from Revenue and it comes within scope of the exchange of information requirements in respect of cross-border tax rulings, Revenue will notify the taxpayer or tax practitioner accordingly and will provide the taxpayer or tax practitioner with a copy of the summary of the opinion that is to be exchanged.

Finally, the guidance states that any information communicated between member states under both the EU Directive and the OECD framework is covered by the obligation of taxpayer confidentiality and enjoys the protection extended to similar information under the national law of the member state that receives it.