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EU Joint Transfer Pricing Forum Statistics on the Advanced Pricing Agreements (APAs) in the EU

The EU Joint Transfer Pricing Forum released details in relation to APAs within the EU for 2016 in March 2018.

An APA is an agreement between a taxpayer and tax authority determining the transfer pricing methodology for pricing the taxpayer’s related party transactions. The methodology can be applied for a certain period of time based on the fulfillment of certain terms and conditions (called critical assumptions).

An APA’s purpose is to prevent disputes between a tax administration and the taxpayer with respect to the covered transactions and to prevent the risk of double taxation. It provides certainty about the selected transfer pricing methodologies and may mitigate audit exposure with regard to major transfer pricing issues. Within the APA framework, tax administrations and taxpayers cooperate with each other in a non-adversarial environment.

At this point, it is important to make the distinction between unilateral, bilateral and multilateral APAs.

Unilateral APA: an APA that involves only the taxpayer and the tax authority of the country where the taxpayer is located.

Bilateral APA (BAPA): an APA that involves the tax payer, associated enterprise (AE) of the tax payer in the foreign country, tax authority of the country where the tax payer is located, and the foreign tax authority.

Multilateral APA (MAPA): an APA that involves the tax payer, two or more AEs of the tax payer in different foreign countries, tax authority of the country where the tax payer is located, and the tax authorities of AEs.

This distinction is important as a bilateral APA provides certainty to taxpayers that the covered transfer pricing issues will not be subject to audit adjustments by the tax authorities of either country taking part in the APA, provided of course that the terms and conditions are satisfied.

Bilateral APAs are gradually becoming the preferred route for businesses seeking certainty as to their transfer pricing policies.

The table below provides a summary of the EU Joint Transfer Pricing Forum statistics on APAs in the EU at the end of 2016. For further information relating to the APA Statistics in EU, please read the EU joint transfer pricing forum document.

MS

APA options available

Total number of APA's in force

Total number of bilateral and multilateral APA's in force

Total number of unilateral APA's in force

EU

Non-EU

EU

Non-EU

EU

Non-EU

Austria

U|B|M|AR

1

1

1

1

n/a

n/a

Belgium

U|B|M|AR

655

440

8

6

647

434

Bulgaria

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Croatia

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Cyprus

AR on request

n/a

n/a

n/a

n/a

n/a

n/a

Czech Republic

U|B|M|AR

45

10

1

0

44

10

Denmark

B|M|AR

3

9

3

9

-

-

Estonia

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Finland

U|B|M|AR

23

27

3

2

20

25

France

U|B|M

17

34

10

26

7

8

Germany

U|B|M

18

27

18

27

-

-

Greece

U|B|M

2

-

1

-

1

-

Hungary

U|B|M

43

20

-

-

43

20

Ireland

B|M

5

2

5

2

-

-

Italy

U|B|M

37

41

2

3

35

38

Latvia

U

1

-

-

-

1

-

Lithuania

U|B|M|AR

2

1

-

-

2

1

Luxembourg

U|B|M

599

-

-

-

599

-

Netherlands

U|B|M|AR

-

-

-

-

-

-

Poland

U|B|M

15

9

4

3

11

6

Portugal

U|B|M

5

1

1

-

4

1

Romania

U|B|M

5

6

-

3

5

3

Slovak Republic

U|B|M

-

1

-

-

-

1

Slovenia

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Spain

U|B|M

39

14

9

1

30

13

Sweden

B|A

3

5

3

5

-

-

United Kingdom

U|B

21

80

21

36

0

44

Total

 

1539

728

90

124

1449

604

* U-Unilateral, B-Bilateral, M-Multilateral and AR-Advanced Rulings

 

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