National legislation authorizes the issuance of a unilateral APA in the form of a binding decision, and bilateral or multilateral APAs may be concluded in accordance with New Zealand`s double taxation conventions. We have gradually developed this activity as the ultimate solution for complex cases with difficult facts and circumstances. The product is particularly suited to material asset issues, which can give rise to a wide variety of opinions on pricing. Our inventory of the APA can be summed up as follows. From the early to mid-1990s, AAAs were part of federal and international transfer pricing rules, but this appears to be the first formal program proposed at the national level.  “In general, an APA is an agreement between the taxpayer and [a government] that binds the taxpayer to a defined transfer pricing method and in return… [Government] will not question the review if the [Intercompany] transactions… the terms of the agreement were executed along the length of the arms.  APAs may be unilateral (with a government) or, if there are tax, bilateral or multilateral agreements (between or between two or more governments and related parties involved in each country). As a general rule, taxpayers should ask the relevant governments for an APA (which requires prior information and substantial economic information), in the hope that governments will accept the APP request. Even if governments accept this request, there is no guarantee that governments and taxpayers will reach a final agreement.
Download our transfer pricing brochure for more details. They result in considerable time and cost savings and security of results for tax administrations and multinational companies in relation to conflicting controls. APAs encourage advance compliance for taxpayers and early resolution of potential disputes. An initial filing fee, as set out in the IR713 application form, must be paid when the formal application for a unilateral APA is filed. Apart from cost coverage, there are no additional costs for the treatment of unilateral APA. Little is known about how IDOR intends to implement its APA program, but an important problem is obvious: Indiana`s program only provides for one-sided APAs. Because of the strength of the international tax treaty, taxpayers often have the option of requesting bilateral or multilateral APAs for their international transactions, which is necessary to ensure true “security” for intercompany transactions in each relevant geography (both parts of the transaction) and avoid double taxation.  Such a bilateral or multilateral option does not exist at the national level.
Without ensuring that other states (which also wish to expand their own tax bases through transfer pricing adjustments) will meet the results of transfer pricing agreed between one taxpayer and Indiana, taxpayers will not be sure that the results of their intercompany transactions will not be audited, adjusted and doubly taxed by other states.  The Directorate General of Taxes (DGT) will authorize a subject to apply for a unilateral APA if a bilateral APA could not be negotiated or concluded.
Posted in: UncategorizedLeave a Comment (0) ↓