Ireland operates a self-assessment system which requires taxpayers to self-assess their liability to tax. The taxpayer’s assessment of their tax liability is subject to audit and other compliance interventions by the Irish Revenue Commissioners (“Revenue”). Tax controversies in Ireland most frequently arise as a result of these audit and compliance interventions. Where Revenue is not satisfied with a position adopted by the taxpayer it will generally issue an amended assessment or a decision as appropriate.

Controversies can also arise in the context of a range of administrative decisions which Revenue is empowered to make (eg, decisions to grant/not to grant certain authorisations) and in the context of Revenue exercising its various powers (eg, a right of appeal arises in circumstances where Revenue seeks to exercise its power of enquiry outside a general four-year time limit).

Revenue routinely carries out compliance interventions across all tax heads including income tax, corporation tax, stamp duty and value-added tax (VAT).

Disputes in relation to personal income tax are most common. The value of these disputes however tends to be relatively low, save for a small number of exceptional cases in the context of high net worth individuals or anti-avoidance type disputes. 

Disputes in relation to corporation tax tend to have higher values and to be more complex. In recent years, the number of high-value corporation tax disputes has grown significantly. For example, the most recent data available in the Tax Appeals Commission (TAC) Annual Report for 2024 reveals that in 2023 TAC received 482 income tax appeals with a quantum of EUR39 million, while only 43 corporation tax appeals were received, but with a quantum of EUR522 million.

The most effective way of mitigating the potential for tax controversy is to maintain strong tax governance, to keep up-to-date contemporaneous documentation, professional advice and other evidential materials to support tax positions. It is also important to ensure that tax compliance is completed in a timely and accurate manner. Clear and accurate communication with Revenue is also important to ensure unnecessary misunderstandings and disputes are avoided.

Many large taxpayers now also engage with Revenue’s Co-operative Compliance Framework (CCF). CCF is intended to provide a forum for taxpayers to engage directly with dedicated Revenue case officers to ensure ongoing tax compliance and increased certainty in respect of the taxpayers’ affairs.

In order to increase certainty in the context of international arrangements (particularly in relation to transfer pricing), many taxpayers are increasingly seeking to secure bilateral and multilateral advance pricing agreements which are entered into with Revenue and the relevant counterparty jurisdiction with a view to ultimately avoiding double taxation (see further in 8. Cross-Border Tax Disputes below).

Taxpayers who find themselves in a contentious scenario can manage and mitigate adverse outcomes in numerous ways, including through early engagement with Revenue and by making relevant disclosures to Revenue where appropriate.

Ireland has a range of domestic legislation aimed at targeting tax avoidance including a general anti-avoidance provision (which is the subject of ongoing disputes) and a number of more targeted specific anti-avoidance provisions. Commonly, specific tax reliefs have their own targeted anti-avoidance provisions. In recent years, Revenue has more frequently invoked these targeted anti-avoidance rules.

Ireland has implemented the EU Anti-Tax Avoidance Directive into Irish law together with a range of recommendations from the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS) to include the adoption of new transfer pricing rules and the Pillar Two rules. Ireland’s first transfer pricing case was determined in 2024 (59TACD2024) and indications are that the interpretation and application of the Pillar Two rules will likely give rise to disputes going forward.

In circumstances where Revenue raises an amended assessment, any additional tax arising is generally considered due from the date of the original assessment to which the tax relates. As a result, interest will accrue from the date of the original assessment (see below). In certain scenarios, such as where an expression of doubt has been filed by the taxpayer, any tax arising on an amended assessment may be considered due within one month from the date of that amended assessment.

Where a taxpayer appeals an amended assessment which relates to direct tax matters, there is generally no requirement for the relevant tax liability to be paid in advance. However, if the outcome of an appeal is such that tax becomes due and payable by the taxpayer then that tax will generally be deemed to have been due from the date of the original assessment. This will often have implications for the calculation of statutory interest on the late payment of tax (which is currently at a rate of 0.0219% per day) and so many taxpayers opt to pay the relevant tax in advance of an appeal to avoid the accrual of interest.

Revenue selects taxpayers for compliance interventions in reference to a number of risk factors which are identified on the basis of evolving data-driven methodologies such as REAP (Revenue’s electronic risk analysis system) and dedicated real-time risk analytics for certain areas of compliance such as VAT. Revenue also regularly develos specific target areas of focus for audit (eg, capital allowances; R&D credits; transfer pricing; and withholding taxes).

Revenue has published a Code of Practice for Revenue Compliance Interventions (2022) (the “Code”) which details a range of “compliance interventions” which Revenue uses to target compliance based on the level of risk as follows:

• Level 1 – compliance interventions at this level seek to support compliance and include requests for self-review and ongoing compliance engagement with the largest corporate taxpayers via the CCF;
• Level 2 – these compliance interventions involve seeking to confront non-compliance and include risk reviews and audits; and
• Level 3 – this involves Revenue investigations which target the most serious cases such as suspected fraud and tax evasion.

Revenue’s power to conduct “enquiries” (including for the purpose of carrying out various compliance interventions) is subject to a general statutory time limit of four years from the end of the period in which the relevant tax return was filed. This time limit can be extended in certain scenarios such as in the context of fraud or neglect or where Revenue is not satisfied that the underlying return represents a “full and true return of all material facts necessary for the making of an assessment”. 

There is a corresponding time limit which prohibits Revenue from raising an amended assessment outside a general four-year time limit from the end of the period in which the relevant tax return was filed. This time limit is similarly subject to exceptions such as in the case of fraud or neglect or where Revenue is not satisfied that the underlying return represents a “full and true disclosure of all material facts necessary for the making of an assessment”.

Other than the general four-year statutory time limits, there is no specific requirement for audits or other compliance interventions to follow a particular timetable or to be completed within a specific timeframe. It is however noted in the Code that Revenue seeks to carry out compliance interventions “in a timely manner and with the least amount of disruption to the taxpayer”.

There has been a number of recent judicial decisions on the application of the four-year time limit and Revenue has been successful in extending the time limit beyond the four-year period in many of those cases (see the Ireland Trends & Developments chapter in this guide).

Tax audits often take the form of desk audits and/or visits to the taxpayer’s principal place of business. Revenue will however generally engage in a pre-audit meeting and enter into correspondence with the taxpayer to clarify the details of the various books and records which it may wish to inspect. 

Other compliance interventions such as risk reviews tend to be desk based and are generally carried out by way of correspondence with a focus on the review of specific documents and materials. 

Revenue will generally specify the period and issues to which an audit or compliance intervention relates. Areas of special attention often vary depending on the taxpayer profile and the exact matter which is the subject of audit. Current areas of focus include transfer pricing; anti-avoidance, R&D tax credits and amortisation allowances for intangibles. Further details on current areas of focus for Revenue are set out in the Ireland Trends & Developments chapter in this guide.

Cross-border exchanges of information and mutual assistance between tax authorities is currently giving rise to some additional audit activity. Ireland is a party to a range of international information exchange agreements including the OECD Convention on Mutual Administrative Assistance in Tax Matters and a range of Tax Information Exchange Agreements. Ireland has also recently implemented DAC7 (EU Directive 2021/514) which provides a framework for joint audits and, as a result, activity in this area is expected to increase in the coming years. 

It is important for taxpayers facing audit or other compliance interventions to ensure early engagement and appropriate co-operation with Revenue. This can become an important factor in the context of any penalties which may be applied. Ireland continues to maintain a public list of tax defaulters and co-operative engagement with the Irish tax authorities is a key consideration in whether taxpayers are subject to publication. 

As Revenue continues to adopt a more legalistic approach it is also increasingly important for taxpayers to be aware of all relevant legal issues from an early stage and ensure they are in a position to clearly articulate their position from the outset where necessary. Other relevant legal issues to consider from an early stage include legal privilege; relevant procedural and administrative considerations; evidential requirements; the availability of various taxpayer rights and the ability to defend against any excessive exercise of Revenue powers. Taxpayers should always maintain a focus on having evidential material available to support their tax filings.

The relevant strategic considerations in each case will depend on the specific facts and circumstances and so appropriate legal advice should be sought from the outset of the matter, particularly as any action or non-action taken at audit or compliance intervention stage can frequently impact on future appeals.

Where Revenue issues an amended assessment or decision there is generally a strict 30-day time limit within which that amended assessment or decision must be appealed to TAC (see further in 4. Judicial Litigation: First Instance).

In addition to appeals to TAC, if a taxpayer is not satisfied with the handling of a case by a Revenue official then it is possible to make a complaint under Revenue’s Complaint and Review Procedures. This process involves three stages.

• Stage 1: Complaint – at this first stage a formal complaint can be made to the local Revenue office.
• Stage 2: Local review – if the taxpayer is not satisfied with the outcome of Stage 1, a request can be made for a Local Review by a Principal Officer in the relevant divisional office.
• Stage 3: Independent review – if the taxpayer is not satisfied with the outcome of Stage 2, a request can be made to have a review carried out by an independent reviewer.

Revenue’s Complaint and Review Procedures will not address points of law, save for occasions where Revenue’s opinion is clearly incorrect. 

An amended assessment or a decision of Revenue can be appealed to the TAC. TAC is a statutory body and the forum of first instance for most tax-related litigation in Ireland (see further in 4. Judicial Litigation: First Instance).

There is no strict timeline for issuing or processing complaints under Revenue’s Complaint and Review Procedures. Once a Local Review decision issues however the taxpayer must request an independent review (if they so wish) within 30 days.

An appeal to TAC generally must be made within 30 days from the date of the relevant amended assessment or Revenue decision. There is no deadline for TAC to hear or determine upon a matter. However, since its establishment in 2016, the TAC has an excellent record in efficiently processing appeals and ensuring the timely delivery of written determinations.

As noted in 3.1 Administrative Claim Phase, the TAC is the forum of first instance for most tax-related litigation in Ireland. The TAC has broad jurisdiction to determine upon a range of matters in relation to an amended assessment or decision of Revenue and has unlimited monetary jurisdiction. The TAC is increasingly asserting its role in applying EU law. Recent EU case law has confirmed the jurisdiction of quasi-judicial bodies such as TAC to consider the validity and interpretation of legislation in light of EU law (a matter which was in doubt in Ireland because of its constitutional framework) and TAC is frequently asserting its jurisdiction in this regard.

TAC does not have jurisdiction to apply certain administrative or public law remedies pertaining to the conduct or actions of Revenue and disputes on these matters must be pursued through the conventional courts system. In some scenarios, it may be necessary to seek judicial review which must be commenced within a strict three-month time limit (from the time when grounds first arise).

The stages in an appeal before the TAC can be broadly summarised as follows.

Notice of Appeal

An appeal is commenced when a taxpayer files a Notice of Appeal (NoA). A NoA generally must be filed within 30 days from receipt of the relevant amended assessment or Revenue decision. It is necessary to set out all grounds of appeal in the NoA and failure to do so can impact the course of the dispute (eg, where a ground of appeal is not included in the NoA it may limit the possibility of raising arguments on that ground in the course of hearing).

Statement of Case

Once the TAC has accepted an appeal it will then generally request the parties to provide a Statement of Case, which requires parties to set out further information and background on the appeal.

Outline of Arguments

The TAC will generally issue a direction for both parties to provide a written Outline of Arguments (OoA) in advance of hearing. The OoA is a legal submission and is therefore an important document, particularly in appeals which involve technical points of law, as it sets out the position of the parties in detail.

Statement of Facts/Issues

The TAC will often request the parties to provide a Statement of Facts and to seek to agree on relevant matters of fact where possible in advance of hearing (often presented as an Agreed Statement of Facts). This is intended to ensure the efficient conduct of proceedings before the TAC by ensuring that time at hearing is not spent on (often non-controversial) matters which could be agreed between the parties in advance.

Pre-Hearing Conference

A pre-hearing conference may often be convened to resolve matters which may arise in advance of hearing (eg, procedural matters or matters relating to evidence/exchange of papers, etc).

Hearing

The hearing before the TAC generally takes place in private (ie, members of the public/journalists, etc, are generally not permitted to attend hearings) and can vary in length depending on the nature of the matters at issue.  In most large or complex cases both sides will be represented by a full legal team. The TAC will generally issue a direction for all relevant books and papers to be exchanged between the parties and submitted in advance of hearing as appropriate. Witnesses are required to give evidence under oath or affirmation before the TAC.

Determination

The TAC provides written determinations in respect of appeals which come before it and these are made publicly available, generally in redacted anonymised form where the matter was heard in private. While there is no strict timeline for TAC to issue a determination following the completion of a hearing it generally processes appeals in a very efficient manner such that most determinations tend to issue within a short number of months.

The TAC will generally issue a direction for any relevant documentary evidence and witness reports to be exchanged between the parties and submitted to TAC in advance of hearing.

It is not uncommon for written witness reports to be prepared in advance of hearing, particularly in the case of expert witnesses. Witnesses relied on by either party must generally be available to give oral evidence to the TAC and to be cross-examined as appropriate.

Establishing all relevant evidential requirements is particularly important in appeals before TAC as it is the main fact-finding forum in tax appeals with any onward appeals generally on points of law only (see further in 5. Judicial Litigation: Appeals).

The burden of proof in civil tax appeals generally rests with the taxpayer, although there are some limited scenarios in which the burden can shift to Revenue (eg, where a Revenue officer is required to satisfy that they had “reasonable grounds for believing” there was fraud or neglect in the context of issuing an otherwise out of time assessment). The standard of proof in civil appeals is on the balance of probabilities.

In criminal proceedings, the burden of proof rests with the prosecution to prove the matter beyond reasonable doubt.

Strategic considerations in tax appeals tend to be fact specific and require detailed consideration on a case-by-case basis.

Ireland operates a common law system and so the jurisprudence/case law of higher courts is binding on lower courts. The Irish courts also take account of the jurisprudence of the European Court of Justice and the European Court of Human Rights. Judgments of the courts are binding on the TAC. Determinations of the TAC are not binding, though they can be persuasive. In practice, TAC tends to follow its previous decisions unless there are material differences in facts.

Guidelines and commentaries (including those from the OECD) as well as case law from other common law jurisdictions (eg, the UK, Canada, Australia) can often be very influential but are not necessarily binding. In recent years, some international guidelines, such as the OECD transfer pricing guidelines, have been incorporated into Irish law and so their status has been elevated in importance.

Determinations of the TAC can be appealed on points of law only by way of case stated to the High Court. There is a strict statutory timeline and procedure for formulating a case stated with TAC and for remitting it to the High Court. Judgments of the High Court may in turn be appealed onwards to the Court of Appeal or the Supreme Court as appropriate.

The procedure for appealing a determination of TAC by way of case stated to the High Court can be broadly summarised as follows.

• Requisition for case stated: The party seeking to appeal the determination must notify the TAC of its request to have the case stated to the High Court. This must be filed within 42 days from the date of the TAC’s determination.
• Draft case stated: The TAC will prepare a draft case stated for the High Court (within three months of receiving the requisition for case stated).
• Representations: Both parties will have 42 days to make representations in respect of TAC’s draft case stated.
• Final case stated: The TAC will finalise the case stated within 21 days with the benefit of representations from the parties.
• Submission to the High Court: The party seeking to have the case stated to the High Court must submit the final case stated to the High Court within 14 days from receiving it from TAC.

Any onward appeals from the High Court are in turn governed by the relevant Rules of Court.

Appeals before the TAC are determined by Tax Appeal Commissioners while appeals before the High Court, Court of Appeal or Supreme Court are determined by appointed judges.

In the Court of Appeal and Supreme Court judges generally sit as a panel of judges (eg, three or five judges) with appeals being determined on the basis of simple majority.

There is currently no formal ADR mechanism for the resolution of domestic tax disputes with Revenue. However, there are certain mechanisms in an international context as described further below (see further in 10. International Tax Arbitration Options and Procedures).

Notwithstanding that there is currently no formal ADR mechanism for the resolution of domestic tax disputes, Revenue is generally open to engaging in settlement discussions in appropriate cases. It is often possible to engage in settlement discussions at any stage of proceedings. In its annual report for 2023 TAC notes that appeals with a total value of EUR668 million of tax were settled.

Where Revenue engages in settlement discussions, it may be possible to reduce the amount of tax at issue on an amended assessment or Revenue decision. Legislation provides for a reduction in penalties in certain scenarios depending on a variety of factors such as the level of co-operation offered by the taxpayer and the exact quantum of the final tax at issue (see further in 7.1 Interaction of Tax Assessments With Tax Infringements). 

Revenue will only offer an opinion or confirmation on matters which are particularly complex or where there is genuine uncertainty in relation to the interpretation or application of the relevant rules.

Ireland also operates a formal programme for bilateral advance pricing agreements which facilitates taxpayers in achieving certainty and avoiding double taxation in respect of cross-border matters, particularly transfer pricing (see further in 8.4 Unilateral/Bilateral Advance Pricing Agreements).

Please refer to 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction; 6.2 Settlement of Tax Disputes by Means of ADR; and 6.3 Agreements to Reduce Tax Assessments, Interest or Penalties.

Please refer to 10. International Tax Arbitration Options and Procedures.

Penalties and criminal proceedings (which can result in fines and/or imprisonment) depend in many respects on the conduct of the taxpayer (eg, whether the taxpayer co-operated in full, whether there was fraud, etc) and the specific quantum of tax in dispute.

Tax Geared Penalties

In circumstances where Revenue raises an amended assessment, the taxpayer may also become liable to penalties. Tax geared penalties apply at various rates up to 100% of the “difference” between the amount of tax which was paid and the amount of tax which ought to have been paid. However, there is scope to reduce the rate of tax geared penalties, particularly where the taxpayer co-operates with Revenue and where relevant disclosures are made. The tax geared penalties can be reduced significantly (as low as 3%) for taxpayers who engage with Revenue through the voluntary disclosure regime.

Fixed Penalties

In addition to tax geared penalties, Revenue may also impose fixed penalties in certain scenarios (eg, fixed penalties of EUR3,000–EUR4,000 can apply for, among other things, failure to make a return or for failure to keep full and true records).

Criminal Proceedings – Fines and Imprisonment

In the most serious cases (eg, cases involving suspected fraud or tax evasion) Revenue may carry out an investigation which can give rise to criminal proceedings. Where a taxpayer is convicted of a criminal tax offence they may become liable to a fine of up to EUR126,970 and/or a period of imprisonment of up to five years. 

Most Revenue compliance interventions in Ireland take the form of a Level 1 or a Level 2 compliance intervention (see 2.1 Main Rules Determining Tax Audits) which do not involve criminal matters. However, where Revenue becomes concerned during the course of a Level 1 or a Level 2 compliance intervention that criminal offences may potentially be at issue then they may elevate the compliance intervention to a Level 3 investigation.

In Ireland, criminal offences are generally prosecuted by the Director of Public Prosecutions (DPP) and the decision on whether to proceed with the prosecution of any given criminal offence (including tax related offences) rests with the DPP. In this way, while Revenue may conduct investigations which give rise to criminal prosecutions, such cases are ultimately prosecuted separately by the DPP.

As detailed in 4. Judicial Litigation: First Instance, appeals on matters in relation to amended assessments and Revenue decisions are generally appealed to the TAC in the first instance. However, where penalties applied by Revenue are not accepted by a taxpayer then it is necessary for the matter to be determined by a court. This only arises in the most serious of cases.

Criminal cases for prosecution of tax-related offences (which can give rise to fines and/or imprisonment) are taken by the DPP (see further in 7.2 Relationship Between Administrative and Criminal Processes).

The relevant court for proceedings to give effect to Revenue penalties (as detailed in 7.3 Initiation of Administrative Processes and Criminal Cases) will depend on the quantum of the penalties at issue. Currently the monetary jurisdiction of the various courts in Ireland is as follows:

• District Court – up to EUR15,000;
• Circuit Court – up to EUR75,000; and
• High Court – over EUR75,000.

Where the DPP initiates criminal proceedings to prosecute an offence under the TCA then this will be in the court of relevant jurisdiction depending on the seriousness of the relevant offence (eg, the District Court has only summary jurisdiction while the Circuit Court has jurisdiction to deal with more serious matters on indictment).

In Ireland, the application and exact quantum of fines is a matter for the relevant court.

As detailed at 7.2 Relationship Between Administrative and Criminal Processes, the prosecution of Revenue offences is a matter for the DPP.

Decisions of a court in Ireland are generally appealable to a higher court in the hierarchy. Accordingly, decisions of the Circuit Court are generally appealable to the High Court and onwards to the Court of Appeal and Supreme Court where permitted.

Tax disputes in relation to various transactions (including those involving transfer pricing, TAAR or the GAAR) are generally resolved without criminal prosecutions. In recent years, criminal prosecutions for Revenue offences have most frequently involved issues in relation to indirect taxes (eg, excise and VAT matters).

The most common forum for dispute resolution in the context of double taxation in Ireland is by way of mutual agreement procedure (MAP) with taxpayers generally opting to stay any domestic proceedings pending the outcome of MAP.

Irish taxpayers can seek MAP under three main instruments (albeit the scope, application and interoperation of the various instruments often requires detailed consideration on a case-by-case basis):

• the relevant double taxation agreement (DTA) in place with the counterparty jurisdiction;
• the EU Convention on the Elimination of Double Taxation in Connection with the Adjustment of Profits of Associated Enterprises (the “EU Arbitration Convention”); and
• Council Directive 2017/1852 on Tax Dispute Resolution Mechanisms in the EU, as implemented in Irish domestic law (the “EU TDRM”) (which came into effect from 2018).

The EU TDRM came into effect from 2018 and in 2019 Ireland also ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Both the EU TDRM and the MLI provide for, among other things, arbitration in the context of double taxation disputes which may not otherwise be resolved by way of MAP. It is expected that both the EU TDRM and the MLI will impact on the approach and strategy to the resolution of double taxation disputes in the coming years.

Ireland has a number of SAARs, a GAAR and has adopted the principal purpose test in Article 7 (Prevention of Treaty Abuse) under the MLI.

A number of SAARs specifically target cross-border scenarios however Ireland has reserved the right to exclude the GAAR from the scope of Part IV (Arbitration) under the MLI.

While the principal purpose test has not yet been tested in Ireland it is expected to become an area of increased focus in coming years.

Most transfer pricing adjustments involving Ireland are currently resolved by way of MAP under the DTA with the relevant counterparty jurisdiction. In certain scenarios, transfer pricing adjustments are challenged under domestic law and the TAC issued its first determination in a transfer pricing appeal in 2024 (TAC determination 59TACD2024).  It is expected that the EU TDRM and related arbitration provisions may grow in importance for appropriate challenges to international transfer pricing adjustments in future years.

While it is not possible to obtain a unilateral advance pricing agreement (APA) in Ireland, bilateral APAs have become more common in recent years.

Ireland’s bilateral APA process has a number of stages, as follows.

• Pre-filing: The pre-filing stage allows the taxpayer to contact a member of the Transfer Pricing Branch to establish the appropriateness of seeking an APA in the relevant circumstances.
• Formal APA application: The formal APA application must include all information required by Revenue. In this regard Revenue generally requires the APA application to include (i) an executive summary; (ii) company background information; (iii) an industry analysis; (iv) an overview of the covered transactions; (v) a functional analysis; (vi) an economic analysis; (vii) financial information; (viii) details of any relevant tax authority audit or examination; and (ix) copies of all relevant legal agreements.
• Evaluation of APA application and negotiation of APA: During the evaluation of the APA application Revenue may request additional information or seek to conduct site visits/interviews. Revenue will then proceed to negotiation of the APA with the relevant counterparty jurisdiction but may continue in contact with the taxpayer to clarify any matters arising.
• Formal agreement: If Revenue reaches agreement with the counterparty jurisdiction, it will request the taxpayer to accept the terms of the agreement in writing. Where the taxpayer does not agree with the terms agreed by Revenue with the other jurisdiction, Revenue will generally consult with both the taxpayer and the counterparty jurisdiction to seek resolution in so far as might be possible.
• Annual reporting: Once an APA is agreed, the taxpayer will be obliged to comply with any annual reporting requirements and generally must provide an annual report to Revenue detailing various matters of relevance in the context of the APA.

Litigation relating to cross-border situations in Ireland generally tends to focus on withholding tax, issues in the context of cross-border transactions (eg, exit tax and valuation), residency issues and, more recently, transfer pricing. The increase in audit activity in relation to transfer pricing matters over recent years is expected to result in a related increase in transfer pricing litigation in time.

In September 2024, the Court of Justice of the European Union (CJEU) delivered its judgment in Case C-465/20 P (Commission v Ireland and Others) concerning historic tax rulings issued by Ireland to Apple. The CJEU reversed the judgment of the General Court (which had held in favour of Apple) and held that the historic rulings (relating to the method used by Apple for determining the chargeable profits of Irish branches) issued by Ireland constituted unlawful state aid. 

In the case of Apple (referred to in 9.1 State Aid Disputes Involving Taxes) the EU Commission commenced the proceedings by way of a decision under Article 108(2) of the Treaty on the Functioning of the European Union. In accordance with the final judgment of the CJEU, Ireland was ordered to recover the unlawful state aid. 

As detailed in 9.1 State Aid Disputes Involving Taxes, Apple (together with Ireland) challenged the Commission’s claim of unlawful state aid.

There have been no cases in Ireland or refunds, following subsequent litigation against the state, invoking extra-contractual civil liability.

Ireland has adopted Part VI (Arbitration) of the MLI.

Ireland has not placed any limitations on the type of matters which may be submitted for arbitration under the MLI. However, it is necessary to assess any limitations or reservations which the relevant counterparty jurisdiction may have placed on the application of certain elements of the MLI.

Ireland has included a reservation to Article 19 of the MLI to clarify that arbitration will not proceed in circumstances where a court has issued a decision on the matter.

Ireland has adopted last best offer or “baseball” arbitration under Article 23 of the MLI. The application of baseball arbitration under the MLI will be contingent upon the counterparty jurisdiction also having accepted this approach. Where the counterparty jurisdiction has not accepted baseball arbitration under the MLI, then the independent opinion procedure will apply (unless the contracting states mutually agree on different rules).

Ireland has implemented the EU TDRM into Irish law. The EU TDRM has a number of features not available under other instruments including the potential for jurisdictions to establish an alternative dispute resolution commission and strict timelines for implementing arbitration (with scope for a court application to compel the establishment of an advisory commission within the relevant timelines).

Arbitration is not currently used as a tax dispute resolution mechanism on any regular basis in Ireland. It is expected that the availability of arbitration under the MLI and the EU TDRM will result in an increase in a number of cases proceeding to arbitration in future years.

Ireland implemented the EU Pillar Two Directive into Irish law with effect from 31 December 2023. Negotiations in respect of Pillar One remain ongoing.

It is expected that Pillar Two may potentially give rise to a range of contentious issues in Ireland. While certain mechanisms for the resolution of tax disputes in this context may be available under Ireland’s existing treaty network (as amended by the MLI) and domestic law, it is expected that certain contentious issues under Pillar Two may encounter procedural obstacles (eg, in scenarios where states adopt diverging approaches to the interpretation/application of the relevant rules).

Ireland has opted to apply Article 23(5) of the MLI which provides for confidentiality as between the parties in the context of arbitration. It is possible for the publication of decisions to occur in certain scenarios (in anonymised form) such as is provided for under the EU TDRM.

Please refer to 10.5 Existing Use of Recent International and EU Legal Instruments.

Please refer to 10.5 Existing Use of Recent International and EU Legal Instruments.

The TAC does not levy any fees on parties to a dispute and each party bears their own legal costs in respect of proceedings before the TAC irrespective of the outcome. 

The courts in Ireland (as distinct from TAC) apply nominal fees (eg, for filing certain papers in the court office).

Legal costs in respect of proceedings before the courts generally “follow the event” such that the losing party can become liable to the legal costs for both parties to the dispute. The court however has discretion in the application of this rule and in certain scenarios may order the successful party to cover a portion of the legal costs (eg, in circumstances where the otherwise successful party may not have succeeded on all grounds to an appeal). 

Irish legislation does not provide for indemnities where a court decides that a tax assessment is null and void.

As detailed in 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction there is currently no formal ADR mechanism for the resolution of domestic tax disputes with Revenue. 

The most recent annual report from TAC notes that 1,156 Notices of Appeal were lodged with the TAC in 2023 with the total quantum of assessments being lodged totalling EUR613 million. As at 31 December 2023 there were 933 appeals pending before the TAC with a total value of EUR424 million. This demonstrates the level of efficiency being achieved by the TAC in processing appeals.

There is no published information available in relation to the number or quantum of tax specific cases pending before the courts.

The following is a breakdown of statistics relating to appeals received by TAC in 2023:

• income tax – 482 appeals (EUR39 million quantum);
• VAT – 185 appeals (EUR7 million quantum);
• vehicle registration tax – 65 appeals (EUR€0.4 million quantum);
• corporation tax – 43 appeals (EUR522 million quantum);
• capital gains tax – 144 appeals (EUR11 million quantum);
• capital acquisitions tax – 22 appeals (EUR2 million quantum);
• other (including stamp duty) – 166 appeals (EUR25 million quantum); and
• COVID-19-related – 49 appeals (EUR7 million quantum).

Of all determinations issued since 2020, the TAC has found in favour of Revenue in 78% of determinations compared with 22% of determinations in favour of the taxpayer. When analysed by quantum however, the TAC has found EUR1,075 million in favour of the taxpayer compared with EUR679 million in favour of Revenue, representing a split of 61%:39% in favour of the taxpayer.

Formulation of strategy in tax controversies and disputes is fact specific and requires detailed consideration of legal and evidential matters on a case-by-case basis. In order to ensure the best possible strategic approach and outcome, legal advice should be sought from the earliest stage in all contentious tax matters.