On 15 November 2023, the OECD published statistics on Mutual Agreement Procedures (“MAPs”) and Advance Pricing Agreements (“APAs”) and its Competent Authority awards for 2023.
Insights on Ireland
The Irish Competent Authority was recognised in the following categories:
- Ireland was awarded second place in the category for shortest average time to close MAP cases (other than transfer pricing cases); and
- Ireland was awarded fourth place in the “age of inventory” category, which is assessed based on each Competent Authority’s proportion of outstanding MAP cases which predate 1 January 2016.
The OECD's statistical breakdown on Ireland (here) provided the following industry insights:
MAPs
- In 2023, Ireland closed 53 MAP cases, 30% of which were transfer pricing related cases. 85 new cases were commenced, 35% of which were transfer pricing cases. As of the end of 2023, Ireland had a total of 177 open MAP cases.
- Ireland continues to resolve the majority of its MAP cases by agreeing to fully eliminate double tax. In 2023, the percentage of cases resolved by agreement to fully eliminate double tax was 75% for transfer pricing cases and 46% for non-transfer pricing cases.
- Over 30% of Ireland’s transfer pricing MAP cases are with Italy. Ireland also has a significant MAP inventory with Spain, the US, and the UK.
- The average time to close a transfer pricing MAP case is c.2.5 years. For non-transfer pricing cases, the average timeframe is less than one year. On average, Italian transfer pricing cases take the longest time to resolve (3 years on average), therefore impacting the overall statistics.
APAs
For the first time, the OECD published APA statistics for 46 jurisdictions, noting an aggregate number of over 4,000 APA cases across those jurisdictions. The statistics published show that:
- During 2023, Ireland started 16 new APA cases and as of the end of 2023, Ireland had a total of 68 open APA cases.
- Ireland concluded only one APA in 2023. That said, Irish Revenue’s recent 2023 Annual Report noted that substantial progress was made on four APAs during 2023, leading to their conclusion in early in 2024. Based on our own anecdotal experience, it is expected that next year’s OECD statistics will reflect an increased number of APAs concluded in 2024.
Consolidated information on MAP
- The OECD also released the 2024 update of the Consolidated Information on Mutual Agreement Procedures, which provides an overview of the MAP framework. This paper also includes information on the composition of Competent Authority teams. The paper notes that Ireland’s Competent Authority team has 26 members, making it among the largest Competent Authority teams among the EU jurisdictions included in the report.
Takeaways
It is clear that Ireland remains a highly effective MAP dispute resolution jurisdiction and taxpayers in Ireland are engaging with MAP more and more each year. Ireland’s results are positive and show that even though taxpayers are requesting MAPs more than ever, the Irish Competent Authority team has increased its resources and improved its case management efficiency.
The newly published APA statistics highlight the popularity of the APA programme in Ireland in recent years, as taxpayers seek bilateral and multilateral certainty amid international tax reform and tax challenges. While there is more work to be done to reduce the timeframe to conclude cases, the results highlight the highly technical and complex nature of international disputes and the investment by Ireland to work to solve these cases.
Matheson's transfer pricing team has extensive experience working on MAPs and APAs with our clients. Matheson regularly works with tax and legal advisors across a range of jurisdictions coordinating MAPs, APAs and international tax disputes. If you have any questions, please contact Mark O'Sullivan, Anna Crowley or your usual Matheson Tax contact.