Advance Pricing Agreements Transfer Pricing

Unilateral APAs take the form of a binding decision. Transfer pricing issues are not considered appropriate for short-term decisions. The application must be filed at the same time as a completed private decision request – form IR713 and request for a private decision on the transfer pricing agreement – Supplementary statement – form IR713A. We found unilateral APAs successfully in inbound and Outbound transfer pricing scenarios. Although unilateral APAs are unilateral, in the event of double taxation of transactions covered by a unilateral APA, we will enter into negotiations with the relevant authority on the basis of the APA`s unilateral position. Unilateral APAs are particularly viable when small amounts are located and/or where most of the transfer pricing risk in New Zealand lies. Here are the models of applicants` declarations that the applicant must submit to the authorities after the signing of the pre-price agreement. AAAs – in the aforementioned sense – find their legal basis in the Double Taxation Conventions (DBA), in the respective articles on mutual agreement procedures. Germany has concluded DBA with more than 90 countries in the world. Most of these DBAs follow the OECD`s draft international agreement. The provisions on mutual agreement procedures are set out in Article 25, paragraphs 1 to 3, of the OECD Model Convention.

Download our transfer pricing brochure for more details After signing the pre-price agreement with the foreign state (s), BZSt informs the applicant in writing of the result and asks him to approve the content of the contract. In addition, the applicant is asked to waive his right of appeal to the tax office. Once the applicant has agreed to the content and waived his right of appeal, the tax office grants the applicant the corresponding mandatory prior obligation to implement the pre-transfer prices at the national level. The main benefits of an APA include: – the prevention of tax controls for APA-covered transactions (reducing costs and related efforts) and eliminating any transfer pricing adjustments: – removal of late interest and penalties for possible transfer pricing adjustments; Eliminating the costs of establishing the transfer pricing record for APA-covered transactions (during the period during which the APA is in effect); Avoid double taxation. Under German law, a pre-price agreement (APA) is a combination of a prior agreement between the federal states on the transfer price between internationally linked companies and an expanded obligation based on it. At the end of the APA, the participating countries determine the method of transfer pricing to be applied for a fixed period in the future between the related companies or certain parts of the companies concerned. This is an administrative procedure based on requirements. Our approach to completing each APA is tailored to the specific facts and circumstances of the taxpayer, particularly in light of the transfer pricing risks that are addressed.

Since each case will be different, we have not put in place a standardized formal procedure. Taxpayers who wish to attend an APA or discuss our likely requirements should refer to the addresses of our «Formal Registration» section.