Taxes Consolidation Act 1997 section 835E

Modification of basic rules on transfer pricing for arrangements between qualifying persons

Section 835E disapplies the transfer pricing rules in section 835C in computing certain non-trading profits or gains or losses, where an arrangement is between two "qualifying persons" and specified conditions are met.

• A "qualifying person" is a supplier with non-trading income (Schedule D Case III, IV or V) or an acquirer with Schedule D income from a transfer pricing arrangement, who is Irish-resident for income tax purposes and is not a section 110 securitisation company.
• The transfer pricing rules in section 835C are disapplied where either the supplier or the acquirer is an "eligible person" (i.e. has non-trading income from the arrangement) and both parties are qualifying persons for the eligible person's chargeable period.
• The exclusion is subject to anti-avoidance provisions: the arrangement must be for bona fide commercial reasons, the main purpose must not be tax avoidance, excess deductions must not arise, and the arrangement must not be part of a back-to-back scheme designed to obtain a tax advantage through a non-qualifying person.
• A qualifying person must maintain and have available such records as may reasonably be required to demonstrate that the conditions for the exclusion are met.