Advance Pricing Agreement

Advance Pricing Agreement

An Advance Pricing Agreement (APA) is an agreement between a taxpayer and a taxing authority on an appropriate transfer pricing methodology (TPM) for some set of transactions at issue (called "Covered Transactions").

Most APAs involve US taxpayers and the US Internal Revenue Service (IRS), but APAs are also made outside the United States.

Bilateral and multilateral APAs
APAs are generally bi- or multilateral--i.e., they also include agreements between the taxpayer and one or more foreign tax administrations under the authority of the mutual agreement procedure (MAP) specified in income tax treaties. The taxpayer benefits from such agreements since it is assured that income associated with Covered Transactions is not subject to double taxation by the IRS and the relevant foreign tax authorities. It is IRS policy to "encourage" taxpayers to seek bilateral or multilateral APAs where competent authority provisions exist.

Unilateral APAs
It's possible, however, that a taxpayer may negotiate a unilateral APA involving only the taxpayer and the IRS. In this case, the two parties negotiate an appropriate TPM for U.S. tax purposes only. Should the taxpayer be involved in a dispute with a foreign tax administration regarding the Covered Transactions, the taxpayer may seek relief by requesting that the U.S. Competent Authority initiate a mutual agreement proceeding. This assumes, of course, that there is an applicable income tax treaty in force with the foreign country.

The APA Program
Each APA is handled by an APA team. One of the APA Program's designated team leaders is responsible for assembling the team, and it will generally consist of an economist, an international examiner, LMSB field counsel, and--in a bi- or multilateral case--a U.S. Competent Authority analyst tasked with leading discussions with treaty partners. Other team members may include an LMSB International Technical Advisor, LMSB exam personnel, or an Appeals Officer.

External links

* [http://www.ustransferpricing.com/APAs/apa_study_guide.pdf IRS APA Study Guide]
* [http://www.ustransferpricing.com/APA.html U.S. transfer pricing portal site APA information page]


Wikimedia Foundation. 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • advance pricing agreement — A mechanism whereby the setting of transfer prices in respect of specified controlled transactions may be agreed with tax administrations in advance of the transactions being undertaken and reported. This is designed to offer certainty for a… …   Law dictionary

  • Advance Pricing Agreement — Dieser Artikel wurde auf den Seiten der Qualitätssicherung eingetragen. Bitte hilf mit, ihn zu verbessern, und beteilige dich bitte an der Diskussion! Folgendes muss noch verbessert werden: Relevanz lässt sich erahnen, so aber kein sinvoller …   Deutsch Wikipedia

  • Advanced Pricing Agreement — Advanced Pricing Agreements (APAs) betreffen im Bereich der Verrechnungspreise Vorabverständigungsverfahren zwischen einem oder mehreren Steuerpflichtigen und einer oder mehreren Steuerverwaltungen. Die Steuervereinbarung legt vor der… …   Deutsch Wikipedia

  • Advance Determination Ruling - ADR — A decision or ruling issued by the Internal Revenue Service to a taxpayer with regard to a taxation or pricing matter. While determination letters from the IRS usually address transactions that have already occurred, they may also be issued on… …   Investment dictionary

  • Transfer pricing — refers to the pricing of contributions (assets, tangible and intangible, services, and funds) transferred within an organization. For example, goods from the production division may be sold to the marketing division, or goods from a parent… …   Wikipedia

  • Advance-fee fraud — African sting An advance fee fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain.[1] Among the variations on this type of scam are the Nigerian Letter (also… …   Wikipedia

  • Transfer Pricing — Als Verrechnungspreis (bzw. Transferpreis oder Konzernverrechnungspreis) wird in der Kosten und Leistungsrechnung derjenige Preis bezeichnet, der zwischen verschiedenen Bereichen eines Unternehmens oder zwischen verschiedenen Gesellschaften eines …   Deutsch Wikipedia

  • Congestion pricing — Typical traffic congestion in an urban freeway. Shown here I 80 Eastshore Freeway, Berkeley, United States …   Wikipedia

  • Steven Hannes — Steven P. Hannes is a partner in the law firm of McDermott Will Emery LLP based in the Washington, D.C. office. Mr. Hannes was named Best of the Best tax advisors for transfer pricing in surveys by Euromoney in 2001 and 2008. He is also ranked… …   Wikipedia

  • APA — may stand for: * American Psychiatric Association * American Psychological Association; also ** APA style, a writing format developed by the above * American Psychoanalytic Association * American Psychopathological AssociationAPA may also stand… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”