The Irish Revenue Commissioners ("Revenue") recently published their 2024 Annual Report (the “Report”). The Report highlights Revenue’s continued focus on international tax dispute resolution and the evolving role of data analytics and information exchange in Revenue’s risk analysis processes.
We have examined the key statistics and themes emerging from the Report in respect of Advance Pricing Agreements ("APAs"), Mutual Agreement Procedures ("MAPs") and compliance interventions.
APAs and MAPs
It is clear from the Report that the Irish Competent Authority remain focused on resolving international tax disputes in relation to double taxation, negotiating complex transfer pricing issues with other Competent Authorities and ongoing cross-border co-operation.
The Report outlines the following key statistics for 2024:
- 67 MAPs were completed during 2024, including 24 transfer pricing cases;
- 64 MAPs were initiated, including 31 transfer pricing cases – in total, there are 174 cases under negotiation at year end;
- 10 APAs were concluded during 2024; and
- 23 APA requests were received, bringing the total number under negotiation to 80 by year end.
The APA statistics, in particular, are noteworthy given there was a significant increase in new APA requests - from 16 (in 2023) to 23 (in 2024). It is also significant that the conclusion of bilateral APAs increased from 1 in 2023 to 10 in 2024.
The inventory of APAs increased from 68 in 2023 to 80 by the end of 2024. Similarly, the inventory of MAP cases concerning transfer pricing increased from 91 in 2023 to 98 by the end of 2024.
Audit and Compliance Interventions
In 2024, Revenue’s audit and compliance interventions generated a total yield of €637 million. The Report outlines the following key statistics :
- Revenue closed 272,714 audit and compliance interventions, yielding €591 million with €96 million attributed to interest and penalties;
- An additional €46 million was attributed to tax avoidance cases;
- 46 transfer pricing interventions have been finalised since 2015, with a total yield of €788 million in that period;
- Tax settlements amounting to €28.1 million, including €13.9 million on interest and penalties, were agreed and published; and
- A further 46,144 cases were appraised for potential intervention following risk-based selection but were closed as the appraisals indicated that no further action was required.
Risk Analysis and Information Exchange
The Report outlines how Revenue monitors tax compliance through a range of risk identification, assessment and evaluation programmes, together with processes that are supported by real-time data analytics and the interrogation of both taxpayer and third party information. In addition, the Report highlights that the automatic exchange of information with other tax administrations under various statutory provisions and international agreements plays an integral part of Revenue’s profiling and risk assessment processes.
The following statistics demonstrate Revenue’s activities in relation to information exchange:
- Revenue supplied other jurisdictions with details of 38 cross border opinions issued in 2024;
- Country-by-Country (“CbC”) data was exchanged with 72 other jurisdictions and it is noted that CbC reports continue to provide information to inform high-level transfer pricing risk assessments and to evaluate other BEPS-related risks;
- Revenue continues to exchange information with other tax authorities under DAC1 and intermediary disclosures relating to certain arrangements which could potentially be used for aggressive cross-border tax planning under DAC6;
- Reporting under DAC7 commenced in 2024, and Revenue exchanged data on all categories of information with all EU Member States;
- During 2024, Revenue received 2,438 requests for mutual assistance from EU Member States and other countries, while Revenue made 456 such requests; and
- Revenue received 53 Assistance Mutuelle communications from the European Anti Fraud Office. Many of the requests received related to a specific customs risk concerning classification, valuation or origin.
Key Takeaways for Taxpayers
The Report indicates that transfer pricing continues to be a strategic audit priority for Revenue with advanced data analytics and the automatic exchange of information with other jurisdictions playing an increasingly important role in Revenue’s risk assessment of taxpayers.
This audit trend is consistent with other treaty partner jurisdictions and is reflected in the increase to the number of APA requests in 2024 as taxpayers seek certainty to prevent disputes. Although APA and MAP processes can take time to conclude, the Irish Competent Authority are focused on ensuring the timely resolution of cases.
Matheson's transfer pricing team has extensive experience working on both domestic and international tax disputes, APAs and MAPs with our clients. Matheson regularly works with tax and legal advisors across a range of jurisdictions coordinating MAPs, APAs and international tax dispute resolution.