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Legal analysis demonstrates justification requirements for the profit split method in corporate taxation, indicating its utility as both a primary and corroborative allocation tool.
Ireland’s transfer pricing legislation does not prescribe a hierarchy of methods and instead requires taxpayers to select the most appropriate method in accordance with the OECD Guidelines. While the profit split method (PSM) can be applied as the primary method where unique and valuable contributions are made by multiple parties, taxpayers should be prepared to justify its selection over simpler methods. As illustrated in the case study, the PSM can also serve as a valuable corroborative method in competent authority matters, providing additional comfort on the appropriateness of profit allocations. This article is part of a special issue of the International Transfer Pricing Journal on the application of the PSM across jurisdictions. The other articles include the General Report and contributions on Belgium, France, Germany, Italy, Korea, the Netherlands, Portugal, Spain and the United States.
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Duffy et al. (2026) studied this question.
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