Because they operate in an increasingly regulated business environment, where transparency is key, taxpayers need a certain degree of certainty in managing their tax and their potential exposure to risk. Advance pricing agreements (APAs) help provide taxpayers with that certainty.
International Transfer Pricing 2013/14:
An easy-to-use reference guide covering a range of transfer pricing issues.
Transfer pricing perspectives:
PwC's bimonthly publication offers an insight into trends and developments in financial services transfer pricing.
An APA is a contract, usually for multiple years, between a taxpayer and at least one tax authority specifying the pricing method that the taxpayer will apply to its related-company transactions. These programmes are designed to help taxpayers voluntarily resolve actual or potential transfer pricing disputes in a proactive, cooperative manner, as an alternative to the traditional examination process.
Although styled as "advance" agreements, APAs often involve the resolution of transfer pricing issues pending from prior years—and in some cases can provide
an effective means for resolving existing transfer pricing audits or adjustments.
An APA offers a company several other benefits. It provides greater certainty on the transfer pricing method adopted, mitigating the possibility of disputes and facilitating the financial reporting of potential tax liabilities. Importantly, an APA also reduces the incidence of double taxation, and the costs associated with both audit defence and documentation preparation.
How we can help
Assistance with APA requests is one of the key offerings of PwC's global tax controversy and dispute resolution network. We have substantial experience helping companies across a diverse range of industries obtain APAs covering a broad spectrum of intercompany transactions. Many of our professionals hail from academia, industry, and prominent positions within governments—including senior-level positions in governmental agencies responsible for administering APAs.
We can work with you to develop strategies at both the global and local level, and guide you through the process of requesting APAs to help you ensure successful outcomes.