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Advance Pricing Agreement Unilateral

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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. The company should propose in the application a deadline for the APP. As a general rule, this period is three to five years (a longer period being considered only in exceptional cases), depending on the reasonably assumed period that transfer pricing methods will remain appropriate. APAs provide a mechanism to manage and reduce your transfer pricing risk by providing greater security on a prospective basis. The launch of an APA fosters constructive cooperation based on mutual trust, based on early engagement and full and open disclosure throughout the development of the APA. Entering an APA reduces the potential for double taxation in your secret cross-border transactions. 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. Bilateral and multilateral APAs are generally bilateral or multilateral, i.e. they also enter into agreements between the subject and one or more foreign tax administrations under the control of the Mutual Agreement Procedure (POP) under the tax treaties. [3] The subject benefits from such agreements, since he is assured that income from covered transactions is not subject to double taxation on the part of the IRS and the relevant foreign tax authorities. The IRS policy is to “encourage” taxpayers to apply for bilateral or multilateral APA where there are provisions of the competent authority. Little is known about how IDOR intends to implement its APA program,[9] 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. [10] 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.

[11] As noted in HMRC`s 2/2010 Practice Statement, the potential scope of the APA is flexible and can cover a number of issues related to a company`s transfer pricing.

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