The scope of the Transfer Pricing Rules shall cover companies and related parties which are defined as having more than 50% or more common direct or indirect participation rights in large companies that fall in the scope of the Country-by-Country reporting regime, or 75% for those large enterprises that are excluded from such reporting. The Transfer Pricing Rules, 2022 legislation will not apply to companies deemed micro, small or medium sized (SME) as per Annex I of the EU Regulation (EU) No. 651/2014 of 17 June 2014. This in effect creating an exemption from the rules if a company has less than 250 persons employed, has less than €50 million in turnover per year and a balance sheet total of less than €43 million.
An exemption may also apply if the aggregate arm’s length value of all items of income and expenditure deemed revenue in nature within the cross-border arrangement in the year preceding the year of assessment does not exceed €6 million or if the same if deemed capital in nature does not exceed €20 million. A further exemption may apply to securitization transactions.
The rules introduce a computational requirement and further guidance on the transfer pricing methodologies to be used are expected from the CFR in due course.
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