Draft Transfer Pricing Rules – Public Consultation

On 22 December 2021, the Commissioner for Revenue issued draft Transfer Pricing Rules for public consultation. The draft Rules prescribe the requirement for the application of the arm's length principle for the pricing of cross-border transactions between associated enterprises as defined and with permanent establishments. Essentially, the arm's length price is the amount that independent parties would have agreed in relation to the arrangement had those independent parties entered into that arrangement. The requirement will be an income tax requirement and will not affect commercial arrangements or other tax liabilities. Whilst it is envisaged that the OECD Transfer Pricing Guidelines will constitute an important source of reference in the application of the rules, the methodologies for determining the arm's length price are yet to be designated by the Commissioner for Revenue in guidelines yet to be published.