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APA & MAP COUNTRY GUIDE 2018New paths ahead for international tax controversy

01 | APA & MAP Country Guide 2018

ABOUT DLA PIPER

We strive to be the leading global business law firm by delivering quality and value to our clients. We achieve this through practical and innovative legal solutions that help our clients succeed. We deliver consistent services across our platform of practices and sectors in all matters we undertake.

Our clients range from multinational, Global 1000, and Fortune 500 enterprises to emerging companies developing industry-leading technologies. They include more than half of the Fortune 250 and nearly half of the FTSE 350 or their subsidiaries. We also advise governments and public sector bodies.

DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.

DLA Piper has prepared this guide to inform taxpayers about the APA and MAP application procedures as they currently exist in over 40 countries worldwide. The guide provides the acceptance criteria and any collateral issues that may be taken into account when considering the appropriateness of an APA, the application filing process and post-agreement compliance requirements, country statistics, the double taxation treaty network of each country and other relevant information. As the second edition of its kind, it has been updated to include further detail on the MAP application process as it exists in each jurisdiction covered. While all reasonable care has been taken to ensure that the content in this publication was accurate on the stated date of publishing, it is intended for use as a guide only and should not be relied upon without seeking formal advice.

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Since the publication of the first edition of the APA & MAP Country Guide in 2017, there have been significant developments at global (i.e. OECD and UN), regional (EU), and domestic level. These developments are set to increase the possibility to obtain relief from double taxation, and certainty and predictability for businesses in the face of increased cross-border tax controversy.

At the global level, there has been a growing focus on Organisation for Economic Co-operation and Development (‘OECD’) member states’ implementation of anti-avoidance rules into their network of tax treaties. In June 2017, more than 60 countries signed the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (‘MLI’). The MLI is the first multilateral treaty of its kind that allows jurisdictions to transpose results from the OECD/G20 BEPS Action Plan into their existing networks of bilateral tax treaties without having to renegotiate them one by one. Importantly, the MLI contains dispute resolution mechanisms addressing the mutual agreement procedure (‘MAP’), as well as a mandatory binding arbitration process. As of 5 June 2018, 78 jurisdictions have signed the Convention, with still more expressing an intention to sign. Additionally, in October 2017 the OECD released the first peer reviews of the implementation of BEPS Action 14, the objective of which is to encourage use of the MAP. At the time of writing, three rounds of peer reviews have been released, assessing 21 jurisdictions. The publication of the reviews is expected to encourage OECD member states to ensure implementation of the BEPS Action 14 minimum standard in a timely, effective and efficient manner. Meanwhile, and also at a global level, the UN Committee of Experts on International Cooperation in Tax Matters released in May 2018 draft chapters for a new UN handbook on cross-border tax dispute resolution, and a paper outlining proposed updates to a UN manual on negotiating tax treaties. While the drafts are preliminary, they add further to the growing body of literature on tax dispute resolution at the global level.

At a regional level, in October 2017 the Council of the European Union adopted the Directive on Tax Dispute Resolution Mechanisms in the European Union (‘the Directive’). The objective of the Directive is similar to BEPS Action 14, in that it aims to ensure businesses and citizens of the European Union are able to resolve, in a timely fashion, all disputes related to the interpretation and application of agreements that provide for the elimination of double taxation on income and capital. It expands on the scope of existing mechanisms in the EU Arbitration Convention (90/436/EEC) to cover not just disputes concerning profit adjustments of associated enterprises but also other tax treaty related disputes. In particular, non-transfer pricing disputes between member states that cannot be resolved bilaterally will default to be resolved through mandatory arbitration under the new Directive. The Directive will be applicable to matters submitted after 1 July 2019 on issues related to the tax year starting on or after 1 January 2018.

Meanwhile, on a domestic level, over the past year alone several countries have released new guidance, either on the application process for bilateral advance pricing agreements (‘APAs’), or the MAP negotiation process in their respective jurisdictions. These include Belgium, Canada, India, Ireland, Japan, Luxembourg, Morocco, Norway, Poland, Singapore, the United Kingdom, and the United States. Such efforts are expected to make APAs and MAP viable mechanisms to both prevent potential future disputes and to resolve those that have arisen with either a taxpayer or tax treaty partners.

Faced with uncertainty and/or double taxation, the decision of whether an APA is appropriate or whether to pursue MAP will of course be unique for every company, country, and transaction. A number of factors should be considered, including strategic considerations and local knowledge beyond the stated rules. As a result of recent developments, and as tax authorities interact ever more closely with each other, there are new paths ahead that make entering into an APA and accessing MAP the favourable strategy for taxpayers.

We trust you will find this guide to be a valuable resource, please reach out to local DLA Piper tax contacts to discuss this or other related topics further.

FOREWORD

1 Best Practice 4 of the OECD/G20 Base Erosion and Profit Shifting Project, Making Dispute Resolution Mechanisms More Effective, Action 14 – 2015 Final Report, p 30.

Joel Cooper

Co-Head International Transfer Pricing

Randall Fox

Co-Head International Transfer Pricing

CONTENTS


ABOUT DLA PIPER ................................... 1

FOREWORD ............................................... 2

GLOSSARY ................................................... 4

ABBREVIATIONS ....................................... 6

INTRODUCTION ...................................... 7

COUNTRY GUIDES .................................. 15

Albania .................................................... 16

Australia ................................................. 22

Austria ..................................................... 29

Belgium ................................................... 36

Canada .................................................... 42

China ....................................................... 51

Colombia ................................................ 59

Croatia .................................................... 64

Czech Republic ..................................... 73

Denmark ................................................. 78

Finland ..................................................... 84

France ...................................................... 90

Georgia ................................................... 96

Germany ................................................. 102

Hong Kong ............................................. 112

Hungary .................................................. 120

India ......................................................... 127

Indonesia ................................................ 135

Ireland ..................................................... 144

Israel ........................................................ 154

Italy .......................................................... 160

Japan ........................................................ 167

Luxembourg........................................... 175

Mexico..................................................... 182

Morocco ................................................. 193

Netherlands ........................................... 198

New Zealand ......................................... 205

Norway ................................................... 211

Peru .......................................................... 219

Poland ...................................................... 223

Portugal .................................................. 229

Romania .................................................. 236

Russia ....................................................... 244

Singapore ................................................ 251

Spain ........................................................ 258

Sweden .................................................... 266

Switzerland ............................................ 273

Thailand .................................................. 278

Ukraine ................................................... 283

United Kingdom ................................... 289

United States ......................................... 301

Vietnam ................................................... 315

DLA PIPER CONTACTS BY COUNTRY ................................................... 324


GLOSSARY

1 OECD Transfer Pricing Guidelines 2010, p 23.

Advance pricing agreement (or ‘APA’)

An APA is an agreement that specifies the transfer pricing arrangements that a taxpayer will apply to certain transactions for an agreed future period.

Arm’s length principle

The international consensus for determining transfer prices for direct taxation purposes, as elaborated in Article 9 of the OECD Model Tax Convention: ‘[where] conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly’.1

Arm’s length range

A range of arm’s length results, that may arise due to the application of a transfer pricing method using comparable uncontrolled transactions, or the application of more than one transfer pricing method.

Bilateral advance pricing agreement (or ‘BAPA’)

An APA involving the Competent Authorities of two tax treaty partner countries.

Comparability analysis

An analysis undertaken in order to determine whether the controlled transaction(s) are comparable to one or more uncontrolled transactions for the purpose of accurately delineating the transaction(s) and selecting and applying the transfer pricing method.

Comparable uncontrolled transaction

A transaction between two independent entities that is comparable to the controlled transaction being analysed.

Compensating adjustment

An adjustment by a taxpayer to their tax calculations to report an amount for a controlled transaction that is consistent with the arm’s length principle, though different to the actual amount charged between the parties.

Competent Authority

The designated representative of a government for the purposes of application of a tax treaty.

Controlled transactions

Transactions that fall within the scope of transfer pricing legislation (e.g., transactions between associated parties).


Corresponding adjustment

An adjustment to the tax liability of a taxpayer that is made by the tax administration of the second tax jurisdiction that corresponds to a primary adjustment made by the tax administration in the first jurisdiction and ensures consist allocation of profits and no economic double taxation.

Critical assumptions

Critical assumptions are specific assumptions concerning operational, legal or financial matters relating to a taxpayer, third party, industry or economic conditions, the continued existence of which is necessary for an APA to remain acceptable to all parties. Should a critical assumption be triggered, the APA may need to be revised or cancelled.

Functional analysis An analysis of the functions performed, assets employed and risks borne by the parties to controlled transactions and the uncontrolled transactions for the purposes of performing the comparability analysis.

Multilateral advance pricing agreement

An APA involving the Competent Authorities of three or more tax treaty partner countries.

Multinational enterprise

An entity that is party of a group of companies with operations in two or more countries.

Mutual agreement procedure

A specific procedure by which Competent Authorities can resolve issues concerning the application of a tax treaty.

Permanent establishment

A threshold for the taxable presence of a non-resident taxpayer that is typically defined under domestic tax law and in the ‘permanent establishment’ article of an applicable tax treaty.

Primary adjustment

An adjustment made by the tax administration in a first jurisdiction to the taxable profits of an entity as a result of applying the arm’s length principle to one or more controlled transactions.

Profit potential The expected future profits or losses.

Transfer pricing method

A method or methods that can be applied to establish whether conditions of controlled transactions are consistent with the arm’s length principle.

Unilateral advance pricing agreement

An APA involving the taxpayer and the tax administration in a single jurisdiction.


ABBREVIATIONS

APA Advance pricing agreement

BEPS Base erosion and profit shifting

DPT Diverted profits tax

DTT Double taxation treaty

IFRS International Financial Reporting Standards

MAP Mutual agreement procedure

MNE Multinational enterprise

OECD Organisation for Economic Co-operation and Development

PE Permanent establishment

SME Small and medium-sized enterprises

TP method Transfer pricing method

VAT Value added tax


The OECD BEPS project has brought significant changes to the international tax system and the regulation of cross-border transactions in particular. The OECD has recognised that these changes will lead to an increase in controversy, and has encouraged dispute resolution through the mutual agreement procedure (‘MAP’), and dispute prevention through advance pricing agreements (‘APAs’).

The use of APAs and MAP is likely to become increasingly relevant for taxpayers as countries come under more and more pressure from the OECD to resolve their MAP cases within the 24-month period prescribed under the BEPS Action 14. It is therefore essential that multinational enterprises (‘MNEs’) have strategies in place such as these to manage disputes, or prevent them from arising in the first place. Taxpayers should, if they have not already done so, reconsider their use of these tools in a proactive strategy fit for the post BEPS environment.

ADVANCE PRICING AGREEMENTS

What are the benefits of an APA?

APAs have become increasingly popular with MNEs in recent years as a mechanism for obtaining certainty and alleviating the risk of double taxation. The APA process, which is voluntary, provides a cooperative way of resolving disputes or potential disputes by generating a constructive working relationship between the taxpayer and the tax administration(s).

INTRODUCTION


Benefits of an APA

1. Eliminate double taxation: A bilateral or multilateral APA will eliminate the potential for double taxation.

2. Certainty: APAs provide a solution for taxpayers to resource-plan and manage their overall tax rate without the uncertainty of transfer pricing assessments.

3. Dispute resolution: APAs can be used to bring about long-term solutions to transfer pricing or other tax related disputes by resolving them on a prospective basis.

4. Reputation: The reputation of the taxpayer can be enhanced with tax administrations in numerous countries, as well as publically, by working cooperatively toward an APA.

5. Cost savings: There can be compliance cost savings for the duration of the APA, in particular when considering the audit and dispute costs avoided.

6. Resource management: MNEs can manage their tax resources more effectively and efficiently by electing when and where to engage with tax administrations.

Formal considerations when requesting an APA

While a growing number of jurisdictions have implemented legislation or formal guidance establishing an APA program, the approach taken is not uniform. Considerations such as eligibility for an APA, filing fees and deadlines, procedures specifically designed for small and medium-sized enterprises (‘SMEs’), and rollback availability can vary significantly. As a result, such factors need to be taken into account before initiating the APA application process.

Taxpayers need to ensure that the transaction(s) sought to be covered under the APA meet the relevant acceptance criteria. For instance, Albania, China, Georgia, Hong Kong, and Ukraine have set a minimum threshold for the value of the relevant inter-company transaction(s) that is required to be met in order to be eligible to apply for an APA. Whereas in countries such as France, Germany, the Netherlands, and the United States have specific guidance and procedures for SMEs that actively encourage APA applications, as long as the transaction(s) are sufficiently complex, and double taxation is a distinct possibility in the absence of an APA.

The approach taken in relation to filing fees also varies considerably. In the United States, Canada, and a number of continental European jurisdictions (including Albania, Austria, Czech Republic, Germany, Hungary, Luxembourg, Poland, Portugal, Romania, and Sweden) a filing fee is payable. On the other hand, some jurisdictions such as Australia, Japan, Singapore, and the United Kingdom do not charge a filing fee.


In addition to taxpayer specific considerations, each of the following should be considered before initiating the APA application procedure:

■■ Acceptance criteria and collateral issues: some jurisdictions will have guidance or discretionary practices that will be considered by the tax authority on determining whether a taxpayer is eligible to proceed with a formal APA application. Factors can include the size of the taxpayer’s organisation and the revenue it generates, the complexity of the transaction(s) intended to be covered by the APA, and any collateral issues such as outstanding administrative or judicial proceedings.

■■ Timing requests and deadlines: strict timing deadlines on the initiation of the APA application process and the submission of supporting documentation may be imposed on the taxpayer. Missing these deadlines could result in certain years not being covered by the APA.

■■ Term limits: the taxpayer will discuss with the tax authorities at the pre-filing stage the term of the proposed APA. Typically, an APA will have a five-year term; however, this will vary depending on the jurisdiction and how flexible any local rules are.

■■ Filing fees: a few jurisdictions require a filing fee to be paid, but most have no filing fee.

■■ Rollback availability: some jurisdictions allow for the outcome of an APA to be applied retroactively to previous years (‘rollback’). Rollback availability is subject to the nature of transaction(s) to be covered under the APA and whether they are considered by the tax authority to be sufficiently similar to those in the prior years that the taxpayer seeks to cover.

■■ Other considerations: for taxpayers seeking unilateral APAs, it should be noted that economic double taxation may arise if the tax administration of the other jurisdiction does not agree with the approach adopted in the APA. For bilateral and multilateral APAs, taxpayers are not involved in the negotiations between the tax authorities. These are governed by the MAP in the relevant double taxation treaties.


The APA application process

The APA application process is in many jurisdictions governed by legislation, regulations and/or procedural guidance issued by the tax administration. Typically, it involves a pre-filing stage, a formal application stage, a review and negotiation stage, and implementation and post-agreement compliance stages.

At the pre-filing stage, taxpayers are encouraged, or are required in certain jurisdictions, to meet with the tax authority to initiate the formal APA application process. Pre-filing meetings generally involve:

■■ A discussion of the appropriateness of an APA to the taxpayer’s circumstances;

■■ The cross-border transaction(s) intended to be covered;

■■ The proposed TP method;

■■ The term of the proposed APA; and

■■ Whether a unilateral, bilateral, or multilateral APA is sought.

In some jurisdictions, pre-filing can be conducted on an anonymous basis. After the pre-filing meeting, the tax authority will decide whether an APA is appropriate given the taxpayer’s circumstances.

PRE-FILING

FORMAL SUBMISSION

Once the pre-filing stage has been concluded, the taxpayer may be invited to submit a formal APA application. Typically, this application will require:

■■ Details of the cross-border transaction(s) intended to be covered by the APA;

■■ A comparables analysis;

■■ The selected TP method;

■■ Critical assumptions; and

■■ The term of the APA.


During the review and negotiation stage, the tax authority will analyse and evaluate the APA application and supporting documentation. The tax authority may require further documentation from the taxpayer in order to complete the review stage. For unilateral APAs the taxpayer will negotiate directly with the tax authority. For bilateral and multilateral APAs, the tax authority will negotiate with the relevant tax treaty partner(s) before putting an agreement to the taxpayer for signing.

Once the APA has been signed and has become effective, it will in most cases be subject to annual compliance procedures. Taxpayers will be required to prepare and lodge a report for each income year covered by the APA, usually together with their tax return. This report will typically contain information and documentation sufficient to demonstrate compliance with the terms of the APA.

Jurisdictions with an established APA program usually allow for and have mechanisms to renew an APA at the request of the taxpayer. Renewals are more likely to be granted if the taxpayer requests the renewal within a reasonable period before expiry of the existing term, and can demonstrate that the circumstances have not changed significantly so as to warrant fresh negotiations.

REVIEW & NEGOTIATION

RENEWAL PROCESS

IMPLEMENTATION & COMPLIANCE


MUTUAL AGREEMENT PROCEDURE

What is the role of the MAP?

MAP is a mechanism for tax authorities to discuss the cross-border taxation of specific transactions, with a view to coordinate their approach for the benefit of the taxpayer involved. This process is available under a tax treaty entered into by two or more countries.

When it comes to transfer pricing, article 25 of the OECD Model Convention on Income and on Capital (‘the OECD Model’), mirrored in most tax treaties that are currently in force, provides a mechanism for taxpayers to seek relief from double taxation. The provisions also allow tax treaty partners to negotiate bilateral and multilateral APAs.

Outside of transfer pricing, MAP can be used by taxpayers in any situation where there is taxation not in accordance with the treaty. Examples of issues often taken to MAP include:

■■ determining beneficial ownership of the relevant income;

■■ assessment of capital gains tax;

■■ residency of a taxpayer;

■■ existence of a permanent establishment (‘PE’);

■■ attribution of profit to a PE; and

■■ classification of payments, such as interest, royalties, or dividends.

If tax treaty partners cannot come to an agreement on a particular matter, an increasing number of treaties provide the possibility for arbitration.

Who can access MAP?

Both individuals and multinational corporations can access MAP in the jurisdiction in which they are resident. There is also generally no minimum requirement on the amount of tax in dispute for accessing the MAP. What is required is taxation not in accordance with the treaty. Additionally, many tax treaties provide the possibility for MAP in ‘other’ cases not covered by the treaty.


The MAP application and negotiation process

The process for initiating a MAP is relatively simple, and most countries have designated tax authorities that deal with requests for MAP that are initiated by taxpayers. As a general rule, tax authorities require prospective applicants to submit a formal MAP request. Such requests will require certain information and documentation to be provided, including, generally, at a minimum:

■■ identification of the applicant;

■■ contact information;

■■ disclosure of any authorised representatives and documentation consenting to their authorisation to act on behalf of the applicant;

■■ identification of the relevant tax treaty partner;

■■ identification of the tax treaty and article(s) in that treaty that are relevant to the MAP request;

■■ demonstration of how the applicant in their opinion believes double taxation has or is likely to occur through misapplication of the stipulated tax treaty provision(s);

■■ tax years relevant to the MAP request;

■■ any domestic proceedings concerning the issues intended to be negotiated in the MAP request; and

■■ disclosure of whether the issue intended to be negotiated in the MAP request is subject to an APA or advance ruling.

Once the MAP request has been accepted by the tax authority, it will negotiate with its counterpart in the treaty partner country. The applicant is not directly involved in MAP negotiations. Once an agreement has been reached, the applicant is normally informed in writing, and an explanation of the result will be provided. If the outcome is accepted by the taxpayer, written confirmation of the agreement will be exchanged between the tax authorities and sent to the applicant. Relief will then be administered in accordance with the agreement. If the taxpayer does not accept the agreement, the MAP process will generally be deemed to be concluded with no adjustments made.


How does MAP interact with domestic dispute procedures?

MAP can be initiated separately from domestic dispute resolution mechanisms. A level of consistency, however, between the facts and arguments presented in domestic proceedings and those presented when filing for MAP in the country of residence is always preferable. Furthermore, it is important to consider the impact of any domestic dispute settlement agreements on the applicant’s ability to obtain relief from double taxation later as part of the MAP process, as settlements on disputes associated with cross-border transactions can limit the ability of the taxpayer to be relieved of double taxation. This is mainly due to the fact that such settlements can restrict the practical negotiation between tax authorities: the position as agreed by the applicant with one tax authority may not necessarily be agreeable to the other.

Is MAP a viable alternative for dispute resolution?

With increased tax scrutiny on cross-border transactions, cross-border disputes are on the rise. While MAP cases are increasing year on year, it is still an underused tool mainly due to the lack of understanding of the process involved and perceived legal and practical obstacles. The MAP process is likely to become more effective in the future as tax authorities interact more closely with each other as a result of BEPS. MAP-related meetings and conferences taking place at an international level have already gone a long way to broaden and strengthen bilateral tax authority relationships.

MNEs ought to consider more proactive use of the improved MAP, taken together with similar developments in other countries around the BEPS minimum standards, as a viable compliance risk management tool. Although double taxation is often a precondition in transfer pricing cases that end up in MAP, it is important to note that all issues concerning taxation not in accordance with tax treaties are eligible for MAP.


COUNTRY GUIDES


ALBANIA

APA PROGRAM

KEY FEATURES

Competent authority

General Directorate of Taxation (‘GDT’)

Relevant provisions

Article 36/7 of Law No 8438, December 28, 1998 ‘on Income Tax’; and

APA instructions issued by the GDT.

Types of APAs available

Unilateral, bilateral, and multilateral APAs are available.

Acceptance criteria

Applications will only be considered where the controlled transaction(s) to be covered during the term of the proposed APA exceed, in aggregate, the value of ALL 40m (approx. USD 370,000); or the controlled transaction(s) is sufficiently complex and is of high commercial or economic significance to Albania.

Key timing requests, deadlines

The commencement date for the APA must be the fiscal year that follows the date of signing the APA.

APA term limits There is a five-year maximum term for a unilateral APA. There are no term limits for bilateral or multilateral APAs.

Filing fee The filing fee is ALL 50,000 (approx. USD 400), plus an administrative fee:

Unilateral APA application ALL 300,000 (approx. USD 2,800)

Bilateral APA application ALL 1.2m (approx. USD 11,000)

Multilateral APA application ALL 1.2m

95 percent of the administrative fee will be refunded to the Taxpayer if the GDT rejects the APA application within 30 days from the date of rejection.

Rollback availability

Rollback is not available.


Collateral issues Collateral issues will not be dealt with within the APA. Where collateral issues, such as deductibility, applicability of withholding taxes, existence of and profit attribution to a PE, are identified during the APA process, these may be submitted to the GDT for consideration.

PRE-FILING REQUIREMENTS

Overview A pre-filing meeting with the GDT is mandatory before the submission of an APA application. Pre-filing meetings must be initiated by the Taxpayer through filing of a ‘Pre-filing Questionnaire’ form, which requires the disclosure of the following information:

■■ the Taxpayer’s name and registration number (this can be left blank for anonymous pre-filing);

■■ the Taxpayer representative’s name and contact information;

■■ proposed term of the APA;

■■ type of APA requested;

■■ any foreign jurisdictions involved in the transaction(s) covered;

■■ the proposed tested party; and

■■ proposed dates and times for a pre-filing meeting.

The GDT will respond to the Taxpayer or representative and the pre-filing meeting will be held within 60 days from the receipt of the request. Any statement or representation made by the GDT in the pre-filing meeting is considered informal advice and will not be binding on the GDT.

Anonymous pre-filing availability

Anonymous pre-filing is available.

ALBANIA (cont’d)


APPLICATION REQUIREMENTS

Content of application

The formal APA application must contain the following:

■■ a declaration that the APA application contains all relevant facts and that they are true, correct and complete;

■■ the Taxpayer representatives name and contact information;

■■ the associated enterprises involved in the APA and organisational structure, place of business and tax residence;

■■ indication of the type of APA sought;

■■ the proposed term to be covered by the APA;

■■ the controlled transaction(s) to be covered by the APA;

■■ descriptions of the key agreements between the associated enterprises;

■■ the details of any significant TP arrangements or practices;

■■ a functional analysis of the Taxpayer entity’s business;

■■ details of the economically significant functions performed by each party to the controlled transaction(s), assets used in the process and risks assumed, with a focus on the key factors for realising the controlled transaction(s) covered under the APA;

■■ an industry analysis and the market in which the Taxpayer operates;

■■ an explanation of the Taxpayer’s position in the industry, including major competitors;

■■ a selection and application of the TP method;

■■ the tax and financial position of all associated enterprises involved in the APA for the last three years, including sales, cost of goods sold, operating expenses, profits before taxes, assets, liabilities, number of employees and any other relevant data;

■■ financial forecasts and budgeting for the term of the proposed APA; and

■■ a description of critical assumptions.

Language No specific guidance.

SME provisions No specific guidance.

ALBANIA (cont’d)


OTHER PROCEDURAL CONSIDERATIONS

General The GDT follows a standard pre-filing, application and monitoring process. There are no unique procedural features.

Monitoring & compliance

Taxpayers are required to submit to the GDT a completed ‘APA Annual Compliance Report’ for each of the tax periods covered by the APA.

Renewal procedure

An APA renewal request will go through the same stages as the initial APA request. In practice, it is expected that where there are no significant changes to facts or transaction(s), the evaluation and negotiation period will be significantly shorter.

ALBANIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

No specific guidance.

Relevant provisions

There are no specific provisions for MAP in domestic law. Taxpayers must rely on the MAP provisions under DTTs.

Acceptance criteria









Interaction with domestic proceedings


Arbitration No specific guidance.

STATISTICS

APA The GDT has had an APA program since 2015.

MAP There are no publicly available statistics on MAP.

ALBANIA (cont’d)


DOUBLE TAXATION TREATY NETWORK

The following treaties include MAP provisions which are the basis for bilateral and multilateral APA negotiations:

Austria

Belgium

Bosnia-Herzegovina

Bulgaria

China

Croatia

Czech Republic

Egypt

Estonia

France

Germany

Greece

Hungary

Iceland

India(IV)

Ireland

Italy

Korea (Republic of)

Kosovo

Latvia

Macedonia

Malaysia

Malta

Moldova

Montenegro

Netherlands(I)

Norway

Poland

Romania

Russia

Serbia

Singapore

Slovenia

Spain

Sweden

Switzerland

Turkey

United Kingdom(I), (IV)

ALBANIA (cont’d)

NOTES

I denotes treaties with MAP arbitration provisions.

II denotes treaties with the USSR that remain applicable until a separate tax treaty is concluded.

III denotes treaties between the countries’ representative office in Taipei and the Taipei Economic and Cultural Office in the relevant country.

IV denotes treaties that became effective within the last five years.

V denotes treaties that are awaiting ratification.

VI denotes MAP provisions identical to para 3, art 25 of the OECD Model Convention with respect to Taxes on Income and on Capital.

VII arbitration is to be conducted under the statutes of the ECJ.

VIII arbitration is to be conducted under the statutes of the ICJ.


APA PROGRAM

KEY FEATURES

Competent authority

Australian Taxation Office (‘ATO’)

Relevant provisions

Law Administration Practice Statement 2015/4 (‘PSLA 2015/4’); and Issued guidance available on the ATO website.



Acceptance criteria

According to PSLA 2015/4, requests are more likely to be accepted if transfer pricing issues are complex; uncertainty to how transfer pricing rules apply; and there is a high probability of double taxation without an APA.


The critical dates negotiated with the ATO during the early engagement stage will determine the date from which the APA will commence.

APA term limits There is a five-year maximum term for an APA.

Filing fee There is no filing fee.


Decisions will be made by the ATO on a risk assessment basis.

Collateral issues Administrative or tax issues that are relevant to and may affect the outcome of the APA should be addressed and resolved at the pre-filing stage with the ATO. According to PCG 2018/D2, an APA can cover the application of Australia’s diverted profits tax as a collateral issue. According to PCG 2017/4 and PCG 2017/1, a Taxpayer does not need to self-assess the risk rating of its related party financing arrangement or a centralised function hub (e.g. an offshore marketing hub), if covered by an APA.

AUSTRALIA



Overview Pre-filing in Australia is called ‘early engagement’. An early engagement form containing an outline of the proposed APA must be completed that includes:

■■ name and tax residence country of parties involved;

■■ global group structure;

■■ role of Australian entity within the global value chain;

■■ cross-border dealings covered;

■■ extent of all cross-border dealings;

■■ TP methodology proposed; and

■■ proposed term of the APA.

If the request for a pre-filing conference is accepted, preliminary discussions will address the appropriate treatment of cross-border dealings and any collateral issues. A request review workshop will follow, and the Taxpayer will be invited to lodge a formal APA application.


Anonymous pre-filing is not available.

AUSTRALIA (cont’d)




The ATO will discuss and agree what information is required during early engagement.

■■ actual conditions relevant to the cross-border dealings;

■■ arm’s length conditions relevant to the cross-border dealings;

■■ proposed TP method;

■■ expected result of the proposed method;

■■ critical assumptions;

■■ information agreed to in the early engagement stage or as required; and

■■ bilateral APAs: information requests made by the DTT partner(s) in relation to the APA application and copies of any information supplied by the foreign entity to the DTT partner(s).

Language The documentation should be submitted in English.



General The ATO follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must lodge the ‘Annual Compliance Report’ (‘ACR’) to the ATO for the duration of the APA. Details as to what should be included in the ACR are provided on a case by case basis.



AUSTRIA (cont’d)

OTHER PROCEDURAL CONSIDERATIONS (cont’d)

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry. An APA renewal request will go through the same stages as the initial APA request, unless the ATO considers that a streamlined process is more appropriate. According to PSLA 2015/4 this is more likely when:

■■ there have been no material changes to cross-border dealings or the role of the Australian entity within the global value chain;

■■ there are no proposed changes to the existing APA; and

■■ it is unlikely there will be material changes to dealings covered under the renewed APA.

In the streamlined process the ATO will consider:

■■ whether an APA is still appropriate;

■■ the previous APA’s arm’s length outcomes;

■■ any material changes to the covered dealings;

■■ the updated benchmarks are appropriate; and

■■ evidence of compliance with the existing APA.



MAP PROGRAM

KEY FEATURES

Competent authority

Australian Taxation Office (‘ATO’)

Relevant provisions

Taxation Ruling 2000/16 – Income Tax: international transfer pricing transfer pricing and profit reallocation adjustments, relief from double taxation and the Mutual Agreement Procedure.

Acceptance criteria

A prerequisite for a correlative adjustment is the existence of relevant provisions in a DTT between Australia and the other relevant country. Where there is no DTT between Australia and the country making the adjustment, a correlative adjustment to relieve juridical or economic double taxation will generally not be available.


Most of Australia’s DTTs permit taxpayers to present a case to the ATO within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.






Taxpayers should include the following information in a MAP request to the ATO:

■■ the basis upon which it has formed the opinion that the actions of one or both of the DTT partner countries result or will result in taxation not in accordance with the relevant DTT;

■■ full details of the relevant transactions, the parties to the transactions, as well as the actions relied upon, including:

– identification of the DTT partner country involved

– how the actions affect the tax liability of the Taxpayer and the associated foreign company (where relevant)

– particulars of the taxation that do not accord with the relevant DTT

■■ how the Taxpayer would like the problem resolved, including the relevant provisions of the domestic tax law and the DTT applicable to the resolution of the case.

The ATO will consider whether the Taxpayer has reasonable grounds to seek consideration in the circumstances, and if so, it will endeavour to arrive at a satisfactory solution itself. Where resolution of the case cannot be achieved by the ATO alone, it will resolve the case by mutual agreement with the tax authority of the relevant DTT partner country.




Taxpayers may seek relief using domestic remedies should they choose not to accept the outcome of MAP. The ATO endeavours may cease at the review and appeal stages.

Arbitration The ATO recognises arbitration as an available means of alternative dispute resolution. Australia has also included an arbitration clause in a number of its MAP provisions under DTTs.



STATISTICS

APA There were 131 active APA applications during income year 2015-16 (as at 30 June) and 41 completed applications. The average completion time was 10 months for bilateral APAs and 16 months for unilateral APAs. The ATO has had an APA program since 1991.

MAP Australia had a total of 46 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 28 months for transfer pricing cases, and 9 months for other cases.



Argentina

Austria

Belgium

Canada

Chile(IV)

China

Czech Republic

Denmark

Fiji

Finland

France

Germany(I), (IV)

Hungary

India

Indonesia

Ireland

Italy

Japan

Kiribati

Korea (Republic of)

Malaysia

Malta

Mexico

Netherlands

New Zealand(I)

Norway

Papua New Guinea

Philippines

Poland

Romania

Russia

Singapore

Slovakia

South Africa

Spain

Sri Lanka

Sweden

Switzerland(I), (IV)

Taipei(III)

Thailand

Turkey(IV)

United Kingdom

United States

Vietnam

NOTES










AUSTRIA

APA PROGRAM

KEY FEATURES

Competent authority

Ministry of Finance for bilateral and multilateral APAs; and

the Taxpayer’s local tax office for unilateral APAs (‘Competent authority’).

Relevant provisions

For bilateral and multilateral APAs, the respective Article of the applicable DTT that implements article 25 of the OECD Model Tax Convention on Income and on Capital and the UN Model Double Taxation Convention; and guidance published by the Ministry’s information on MAP. For unilateral APAs, section 118 of the Federal Fiscal Code; and decree of the Ministry of Finance BMF-010103/0035-VI/2011.



Acceptance criteria

For all APAs a formal (written) and timely request to the Competent authority either by the Taxpayer or an authorised representative is required. For bilateral and multilateral APAs the Taxpayer must be eligible under the relevant DTT (treaty protected). For unilateral APAs the issue has to be clearly defined as a transfer pricing question (whereas questions on the existence of a PE would be rejected) and are only foreseen for cases of high fiscal relevance. “Fiscal relevance”, however, has not been expressly defined.


For unilateral APAs the request has to be filed before the covered transactions took place. For bilateral and multilateral APAs, requests have to be filed typically three years after the first notification of the taxation contrary to the DTT; however, specific provisions in DTTs might include deviations. Considering the specific character of APAs usually those timelines will not be relevant.

APA term limits There is no maximum term for bilateral or multilateral APAs; however, in practice most APAs are effective for three to five years.


AUSTRIA (cont’d)

KEY FEATURES (cont’d)

Filing fee For unilateral APAs, filing fees are between EUR 1,500-EUR 20,000 (approx. USD 1,600-USD 21250) depending on the sales revenues of the taxpayer for unilateral APAs: up to EUR 400,000 (approx. USD 470,000): EUR 1,500 (approx. USD 1,750); EUR 400,001-700,000 (approx. USD 470,001-820,000): EUR 3,000 (approx. USD 3,500); EUR 700,001-9,680,000 (approx. USD 820,000-11.3m): EUR 5,000 (approx. USD 5,900); EUR 9,680,001-38,500,000 (approx. USD 11.3m-45.2m): EUR 10,000 (approx. USD 11,750); and from EUR 38,500,001: EUR 20,000 (approx. USD 23,500)

There is no filing fee for bilateral or multilateral APAs.


A rollback is only available for bilateral and multilateral APAs in line with Chapter IV of the OECD Transfer Pricing Guidelines and the BEPS Action 14 Minimum Standard.

Collateral issues No specific guidance.


Overview A pre-filing procedure is usually held for all types of APAs, although this is not specifically regulated. Typically, a Taxpayer will explain the corner stones of the request to all tax authorities during that procedure, including a description of the value chain, the covered transactions, and the applied TP method.






For unilateral APAs the Taxpayer must provide the following written documentation:

■■ the facts on which fiscal assessment is based;

■■ the description of the relevant legal question;

■■ the fiscal relevance of the question;

■■ the Taxpayer’s legal assessment;

■■ the taxes or findings and the periods of time for which the advanced ruling shall apply; and

■■ the extent of the applicant’s reporting obligations.

There is no specific guidance for bilateral or multilateral APAs.

Language Documentation should generally be submitted in German; however, English documentation will usually be accepted.



General The Tax authorities follow a standard application and monitoring process. There are no unique procedural aspects.


The Competent authority may require specific monitoring and compliance processes at their discretion. In practice the Competent authority often includes the requirement of annual reporting in unilateral as well as bilateral and multilateral APAs.

Renewal procedure


AUSTRIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

The Ministry of Finance (‘Competent authority’)

Relevant provisions

Information of the Ministry of Finance on Mutual agreement and arbitration procedures

Acceptance criteria

The Taxpayer must be eligible under one of Austria’s DTTs, or the EU Arbitration Convention (90/436/EEC) to request a MAP. There must be a formal (written) and timely request to the Competent authority including a description of the facts and a legal assessment. The request has to be submitted by the Taxpayer or an authorised representative. Cases resulting from bona fide Taxpayer initiated adjustments are accepted for the MAP program.


Most of Austria’s DTTs permit Taxpayers to present a case within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. The Competent authority is committed to solving MAP cases under DTTs within an average time of 24 months in line with the BEPS Action 14 minimum standard. For cases under the EU Arbitration Convention, respective timeframes will also need to be considered, including guidance in the 2009 Revised Code of Conduct. Article 7/1 of the EU Arbitration Convention foresees a two-year period for concluding the MAP phase. Article 4 of the EU Dispute Resolution Directive also foresees a two-year timeframe for the MAP.

AUSTRIA (cont’d)




The MAP request must include the following:

■■ name and address of the Taxpayer;

■■ tax Identification Number and competent (local) tax office;

■■ description of facts and circumstances;

■■ taxpayer’s legal assessment of the issue;

■■ taxation period;

■■ information on other legal remedies; and

■■ other suitable documentation (e.g. audit reports).




Taxpayers may pursue Austrian domestic legal proceedings separately from MAP; however, Austrian legal proceedings may be suspended until the MAP has been finalised. Audit settlements do not hinder MAP, nevertheless Taxpayers can waive their rights to remedies including MAP after an audit.

It is not specifically regulated whether MAP is open in cases of application of anti-avoidance rules (domestic or treaty). That being said, it has been observed in practice that the Competent authority was reluctant in opening cases under such circumstances. It is not specifically addressed in the legislation whether tax authorities are bound by court decisions in MAP. In practice at least a directive effect of court rulings on the competent authority has been be observed. Suspension of tax collection for the duration of MAP is available on request according to domestic procedural law.

Arbitration Generally, it is Austria’s policy to include arbitration clauses in its DTTs. However, only a limited number of Austrian DTTs at present actually include an arbitration clause. Furthermore, as Austria is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute

AUSTRIA (cont’d)



Arbitration (cont’d)

Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. And the EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA Austria does not make publicly available statistics on APAs. However, respective data is submitted to the Joint Transfer Pricing Forum according to the respective requirements.

MAP Austria had a total of 227 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 41 months for transfer pricing cases, and 38 months for other cases. Statistics are published through the Inclusive Framework’s publications.

AUSTRIA (cont’d)



Albania

Algeria

Armenia

Azerbaijan(I)

Australia

Barbados

Bahrain

Belarus

Belgium

Belize

Bosnia Herzegovina(I)

Brazil

Bulgaria

Canada

Chile

China

Croatia

Cuba

Cyprus

Czech Republic

Denmark

Egypt

Estonia

Finland

France

Germany(I), (IV)

Georgia


Greece

Hong Kong

Hungary

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Japan

Kazakhstan

Kyrgyzstan

Korea (Republic of)

Kuwait

Latvia

Libya

Liechtenstein

Lithuania

Luxembourg

Malaysia

Malta

Macedonia(I)

Mexico

Morocco

Moldova

Mongolia

Montenegro(IV)

New Zealand

Nepal

Netherlands

Norway

Qatar(IV)

Pakistan

Philippines

Poland

Portugal(VI)

Romania

Russia

San Marino

Saudi Arabia

Serbia

Singapore

Slovakia

Slovenia

Spain

South Africa

Sweden

Switzerland

Syria

Taipei(III)

Tajikistan(II)

Thailand

Tunisia

Turkey

Turkmenistan(II)

United Kingdom

Ukraine

United Arab Emirates

United States

Uzbekistan

Venezuela

Vietnam

AUSTRIA (cont’d)

NOTES










BELGIUM

APA PROGRAM

KEY FEATURES

Competent authority

Office for Advance Decisions in Tax Matters (‘Ruling Commission’) for unilateral APAs; and General Administration of Taxation of the Department of International Affairs for bilateral and multilateral APAs (‘GATDIF’).

Relevant provisions

Articles 20-28 of the Law of 24 December 2002 for unilateral APAs; and an information brochure available on the Belgian Federal Public Service Finance website for bilateral and multilateral APAs.



Acceptance criteria



Applications for unilateral APAs cannot relate to situations or transactions that have already produced effects from a tax perspective. Bilateral and multilateral applications must in principle be filed prior to the intended transactions. For practical reasons, GATDIF may allow for bilateral and multilateral APAs to enter into force on the first day of the financial year even if some transactions have already taken place.




Rollbacks are not available for unilateral APAs. Rollback is available for bilateral and multilateral APAs when the relevant facts and circumstances of prior years are identical to those in the proposed APA and filing deadlines have not expired when the bilateral or multilateral APA is concluded with the relevant foreign tax authority. The foreign tax authority must also approve of the rollback.



Collateral issues A unilateral APA application will be rejected if:

■■ the application relates to an appeal or to legal proceedings between the Belgian state and the Taxpayer;

■■ the application deals with recovery and prosecution;

■■ the application relates to tax rates and increases, procedures, and prescriptions;

■■ essential elements of the transaction described are linked to a tax haven that does not cooperate with the OECD; or

■■ the transaction described has no economic substance in Belgium.


Overview Pre-filing applications should include:

■■ a brief description of the transaction to be covered;

■■ the relevant tax provisions as they relate to the transaction; and

■■ any previous rulings and guidelines issued by the tax authorities.





Applications for unilateral APAs must be submitted to the Ruling Commission and include:

■■ the identity of the Taxpayer and of all other parties concerned by the request;

■■ a description of the business activities of the Taxpayer;

■■ a full description of the particular situation or transaction; and

■■ reference to the statutory or regulatory provisions that will constitute the basis of the decision.

BELGIUM (cont’d)


APPLICATION REQUIREMENTS (cont’d)

Content of application (cont’d)

Applications for bilateral and multilateral APAs must be submitted to the GATDIF and include:

■■ the identity and description of the relevant parties;

■■ period of time to be covered by the proposed APA;

■■ description of intercompany transactions;

■■ TP method;

■■ comparative studies;

■■ functional analysis;

■■ any unilateral rulings that the group has concluded;

■■ financial data of the company concerned; and

■■ a power of attorney declaration accompanying applications filed by agents on behalf of the Taxpayer.

Language Applications for a unilateral APA should be submitted in Dutch or French. Applications for a bilateral or multilateral APA should be submitted in Dutch, French or German. Supporting documentation may be submitted in Dutch, French, German or English.



General There are no unique procedural issues.


The Ruling Commission in its decision may require Taxpayers to provide evidence of the correct application of unilateral APAs through documentation submitted with its annual tax return.

Renewal procedure


BELGIUM (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

General Administration of Taxation of the Department of International Affairs for bilateral and multilateral APAs (‘GATDIF’).

Relevant provisions

Circular letter (2018/C/27 d.d. 7 March 2018) issued by GATDIF.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Belgium is signatory.


Most of Belgium’s DTTs permit a Taxpayer to present their case to GATDIF within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit (for instance, the DTT with France prescribes a period of six months in which a case may be presented). Taxpayers have three years to present a case to GATDIF under the EU Arbitration Convention (90/436/EEC).



While no specific form is required, the MAP application must be filed in writing, supported by reasons and documentation enabling the tax authorities to decide whether or not its application is justified.

Language The MAP request should be submitted in Dutch, French or German. An English translation of the request should be submitted if the common working language is not Dutch, French or German. Supporting documentation may be submitted in Dutch, French, German, or English.

BELGIUM (cont’d)




Taxpayers may pursue domestic remedies in parallel with a MAP request.

Arbitration As Belgium is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.

The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA 602 and 1,068 APAs were granted in 2015 and 2016 respectively. Unilateral APAs are usually issued within three months. The average completion time for bilateral and multilateral APAs was 29 months (EU situations) and 34 months (non-EU situations).

MAP Belgium had a total of 752 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 41 months for transfer pricing cases, and 21 months for other cases.

BELGIUM (cont’d)


BELGIUM (cont’d)



AlbaniaAlgeriaArgentinaArmenia(II)

AustraliaAustriaAzerbaijan(II)

BahrainBangladeshBelarusBosnia and HerzegovinaBrazilBulgariaCanadaChileChina(IV)

CongoCroatiaCyprus

Czech RepublicDenmarkEcuadorEgyptEstoniaFinlandFranceGabonGeorgia(II)

GermanyGhanaGreeceHong KongHungaryIcelandIndiaIndonesiaIrelandIsrael

ItalyIvory CoastJapanKazakhstanKoreaKosovoKuwaitKyrgyzstan(II)

LatviaLithuaniaLuxembourgMacedoniaMalaysiaMaltaMauritiusMexico(I)

Moldova(II)

MongoliaMontenegro

MoroccoNetherlandsNew ZealandNigeriaNorwayPakistanPhilippinesPoland(I)

PortugalRomaniaRussiaRwandaSan Marino SenegalSerbiaSingaporeSlovak RepublicSloveniaSouth Africa

SpainSri LankaSweden Switzerland(I)

Taipei(III)

Tajikistan(II)

ThailandTunisiaTurkeyTurkmenistan(II)

UkraineUnited Arab EmiratesUnited Kingdom(I)

United States(I)

Uruguay(I)

UzbekistanVenezuelaVietnam

NOTES










CANADA

APA PROGRAM

KEY FEATURES

Competent authority

Competent Authority Services Division, Canada Revenue Agency (‘CRA’)

Relevant provisions

CRA Information Circulars IC 94-4R, IC94-4RSR, and TPM-11



Acceptance criteria



Pre-filing meetings for the APA application must take place within 180 days after the end of the first taxation year that is to be covered by the APA.

APA term limits There are five-year maximum terms, depending on the relevant facts and circumstances.

Filing fee A levy tailored to each case will apply. This levy is charged on each accepted APA request or renewal and the amount will be included in an acceptance letter.


Rollbacks may be negotiated where the facts and circumstances of open prior years are similar to those on which the APA was concluded. Requests to retroactively apply an APA are separate and distinct from an APA request.

Collateral issues Any relevant tax issues, requests or settlements should be raised at the pre-filing stage.



Overview A pre-filing meeting is required before a formal APA request is submitted to the CRA. An APA request information package must be submitted at least two weeks before the pre-filing meeting an include:

■■ the global structure of the Taxpayer and industry in which it operates;

■■ the parties, participants, transactions and transaction flows proposed to be covered;

■■ transfer pricing, audit and reassessment history, and related domestic or foreign tax audit issues and status;

■■ history of CRA issues, requests, and settlements;

■■ reasons for APA request;

■■ relevant transfer pricing policies, methodologies, practices, and accounting systems and policies;

■■ the TP method contemplated under the APA and underlying rationale;

■■ the impact of the proposed TP method on taxable income;

■■ relevant key interpretive or technical taxation issues;

■■ the reasons for requesting a bilateral APA or multilateral APA, countries involved and the nature and extent of previous communications with foreign tax authorities; and

■■ the key individuals involved throughout the APA process (including officials, employees, experts and advisors) and written authorisation for each representative.


Pre-filing is available on an anonymous basis.

CANADA (cont’d)




While the CRA considers each APA request as unique and may require additional documentation, the following items are generally included as part of an APA request:

■■ details of the Taxpayer, representatives and non-resident entities, including contacts and business identification numbers;

■■ proposed term of APA and any rollback request;

■■ proposed transaction(s) to be covered;

■■ proposed TP method(s);

■■ proposed terms and conditions and critical assumptions;

■■ whether the request is for a bilateral, multi-lateral or unilateral APA;

■■ declaration statement;

■■ history, background, and business description of the Taxpayer;

■■ global structure, organisational arrangement, operational setup, major transaction flows of the Taxpayer;

■■ identification of all transaction flows that may have an impact on the pricing of covered transactions;

■■ functional currency for each entity and currency used for the proposed transactions to be covered;

■■ accounting and cost system, policies, procedures and practices, including any financial and tax accounting differences that may affect the TP methods;

■■ detailed functional analysis of the Taxpayer and relevant entities to the covered transactions;

■■ detailed industry and market analyses;

CANADA (cont’d)




■■ transfer pricing background: legal considerations; methodologies; relevant APA rulings in foreign jurisdictions; any relevant Canadian or foreign income tax audits, appeals, judicial or CA history; Canadian or foreign unassessed taxation years; and

■■ proposed TP method and impact.

The CRA will commit to accept an APA by sending an acceptance letter within 45 days after receiving an APA request.

Language The documentation should be submitted in English or French.



General The CRA follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must provide an APA report demonstrating APA compliance within the time period negotiated with the CRA and specified in the APA.

Renewal procedure

Renewals must be lodged no later than nine months before expiry.

CANADA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Director of the Competent Authority Services Division of the CRA

Relevant provisions

CRA Information Circular IC71-17R5: Guidance on Competent Authority Assistance Under Canada’s Tax Conventions; and CRA Memorandum TPM-12: Accelerated Competent Authority Procedure (ACAP).

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Canada is signatory. The CRA may not accept a MAP request where tax avoidance under the General Anti-Avoidance Rule is involved.


An initial notification briefly indicating the nature of the MAP request and persons and years involved must be submitted to the CRA within the time limits prescribed under the relevant DTT. The prescribed time limit under both the “associated enterprises” and “mutual agreement procedure” provisions of a DTT may both be relevant in the case of transfer pricing, and may not necessarily be the same. Time limits may vary, and the relevant DTT should be consulted for the applicable time limits.



While there is no prescribed form for requesting MAP, the Taxpayer must provide the following information:

■■ name, address, and social insurance number, or corporation identification and business number of the Canadian Taxpayer;

■■ name of the foreign tax administration involved, the article(s) of the DTT which the Taxpayer asserts is not being correctly applied by Canada or the other country, and the Taxpayer’s interpretation of the application of the article;

■■ name, address and, if possible, the identification number of any related foreign Taxpayer involved;

CANADA (cont’d)




■■ relationship between the Canadian Taxpayer and any related foreign taxpayers involved;

■■ taxation years or periods involved;

■■ Tax Services Office or Taxation Centre that has made or is proposing to make the adjustment, if applicable;

■■ a summary of the facts and an analysis of the issues for which competent authority assistance is requested, including any specific issues raised by the foreign tax authority or CRA affecting the Canadian Taxpayer and the related amounts (in both Canadian and foreign currency), each supported by calculations;

■■ for transfer pricing cases, contemporaneous documentation as described in subsection 247(4) of the Act;

■■ a copy of the competent authority request and all the relevant documents filed, or to be filed, with the relevant foreign competent authority, including copies of any correspondence from the other tax authority, and copies of any briefs, objections, etc., submitted in response to the action or proposed action of the other tax authority;

■■ a statement indicating whether the Taxpayer or a predecessor has made a prior request to the CRA on the same or a related issue;

■■ for each Taxpayer involved in the request, a schedule of the statute-barred dates in each jurisdiction (domestic time limits) in respect of all years for which relief is sought;

■■ a statement indicating whether the Taxpayer has filed a notice of objection or a notice of appeal in Canada;

■■ where the request for competent authority assistance involves issues that are currently or were previously considered as part of an APA in Canada or in similar proceedings in the foreign country, a statement to that effect;

CANADA (cont’d)




■■ if consent has not already been provided for a person to act as an authorised representative, a signed statement that the representative is authorised to act for the Taxpayer in making the request;

■■ any other relevant facts;

■■ a copy of any settlement or agreement reached with the other jurisdiction which may affect the MAP process; and

■■ the Taxpayer’s views on any possible bases on which to resolve the issues.

Electronic copies of the above documentation should be provided wherever possible, and signed by the Taxpayer.

Language The documentation should be submitted in English or French.



Domestic appeals are generally to be put in abeyance, and reactivated if the MAP negotiation does not provide a satisfactory resolution of the Taxpayer’s circumstances.

Arbitration Canada has included an arbitration clause in a number of its MAP provisions under DTTs.

STATISTICS

APA There were 132 active APA applications during income year 2014-15 and 31 completed applications. The average completion time for bilateral and multilateral APAs was 48 months. The CRA has had an APA program since 1990.

MAP Canada had a total of 224 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 28 months for transfer pricing cases, and 26 months for other cases.

CANADA (cont’d)


CANADA (cont’d)



Algeria

Argentina

Armenia

Australia

Austria

Azerbaijan

Bangladesh

Barbados

Belgium

Brazil

Bulgaria

Cameroon

Chile(I)

China

Colombia

Croatia

Cyprus

Czech Republic

Denmark

Dominican Republic

Ecuador(I)

Egypt

Estonia

Finland

France(I)

Gabon

Germany

Greece(I)

Guyana

Hong Kong(I), (IV)

Hungary

Iceland(I)

India

Indonesia

Ireland(I)

Israel(IV)

Italy

Ivory Coast

Jamaica

Japan

Jordan

Kazakhstan(I)

Kenya

Korea (Republic of)

Kuwait

Kyrgyzstan

Latvia

Lithuania

Luxembourg

Malaysia

Malta

Mexico(I)

Moldova(I)

Mongolia(I)

Morocco

Netherlands

New Zealand(IV)

Nigeria

Norway

Oman

Pakistan

Papua New Guinea

Peru(I)

Philippines

Poland(IV)

Portugal


CANADA (cont’d)

Romania

Russia

Senegal

Serbia(IV)

Singapore

Slovak Republic

Slovenia

South Africa(I)

Spain

Sri Lanka

Sweden

Switzerland(I)

Taipei(III)

Tanzania

Thailand

Trinidad and Tobago

Tunisia

Turkey

Ukraine


United Kingdom(I)

United States(I)

Uzbekistan

Venezuela(I)

Vietnam(IV)

Zambia

Zimbabwe

NOTES










THE PEOPLE’S REPUBLIC OF CHINA (‘PRC’)

APA PROGRAM

KEY FEATURES

Competent authority

The State Administration of Taxation (‘SAT’); and the relevant local tax authority (‘Tax authorities’)

Relevant provisions

Public Notice on Matters Regarding Enhancing the Administration of Advance Pricing Arrangements (Public Notice of the SAT [2016] 64).



Acceptance criteria

An APA generally applies to enterprises with the annual inter-company transactions over RMB 40m (approx. USD 6.25m) for each of the previous three years.

The Tax authorities will prioritise Taxpayers meeting one or some of the following criteria:

■■ the Taxpayer has fully complied with the PRC inter-company transaction disclosure and contemporaneous documentation requirements, and the information disclosed is reasonably satisfactory;

■■ the Taxpayer has an A-level tax credit rating;

■■ the Taxpayer was subject to a transfer pricing audit, and the audit has been closed;

■■ the Taxpayer has an existing APA it intends to renew, and the facts and operational environment in the existing APA have not and will not foreseeably change;

■■ the application materials, particularly the analysis on the value chain and location-specific advantages, are complete and thorough, and the transfer pricing and calculation methods are reasonable;

■■ the Taxpayer cooperates with the Tax authorities for negotiation and conclusion of an APA; and

■■ in the case of a bilateral or multilateral APA applications, the relevant foreign tax authority have displayed a strong intention and a high degree of attention to the intended APA.


THE PEOPLE’S REPUBLIC OF CHINA (‘PRC’) (cont’d)



An APA will commence from the year during which the Tax authorities issue a ‘Notice of Tax Related Issues’ informing the Taxpayer that they may submit a letter of intent. The Taxpayer may submit a formal APA application upon receiving a Notice of Tax Related Issues from the Tax authorities that indicates their consent to receiving such a submission.




Rollback is available. The retrospective period can extend to a maximum of ten prior years if the related party transactions are the same or similar to those covered by the APA.

Collateral issues Administrative issues that are relevant to and may affect the outcome of an APA may be addressed and resolved at the pre-filing stage with the Tax authorities. Applications from Taxpayers under investigation by the Tax authorities for tax issues will be refused.


Overview The Taxpayer must make a written request to the Tax authorities for a pre-filing meeting. The pre-filing meeting will require the following information and documentation:

■■ duration of the proposed APA;

■■ related parties involved and related party transaction to be covered;

■■ organisational and management structure of the enterprise and group it belongs to;

■■ business operations and transfer pricing documentation of the enterprise for the most recent three to five years;

■■ allocation of functions and risks among related parties covered under the APA, including the parties involved, personnel, expenses and assets;

■■ market conditions, including industry development trends and competitive environment;

■■ any location specific advantages including location savings and market premiums;


PRE-FILING REQUIREMENTS (cont’d)

Overview (cont’d) ■■ whether the proposed APA is intended to be retrospective in application;

■■ in the case of a bilateral or multilateral APA applications, applications submitted for APAs with relevant foreign tax authorities;

■■ in the case of bilateral or multilateral APA applications, business operations and inter-company transaction of the related party involved for the most recent three to five years; and

■■ in the case of a bilateral or multilateral APA applications, any international double taxation issues and relevant explanations.

If an agreement is reached during the pre-filing meeting, the Taxpayer will be required to submit a ‘Letter of Intent for Negotiation and Signing of an Advance Pricing Arrangement’ to the Tax authorities and submit the APA application proposal including the above information and documentation, as well as:

■■ the proposed TP method and calculation method, functional and risk analysis, comparability analysis and assumptions used for supporting such methods;

■■ value chain or supply chain analysis;

■■ annual information on business scale, result forecasts and plans for the proposed term of APA; and

■■ relevant domestic or international laws and rules in the industry that have an impact on the APA.

A declaration that none of the following circumstances exists:

■■ the Taxpayer is now under any tax related investigation;

■■ the Taxpayer is in compliance with related-party dealings disclosure and contemporaneous transfer pricing documentation requirements; and

■■ the Taxpayer and Tax authorities were able to reach an agreement during pre-file meeting in relation to the APA application.







If the Tax authorities determine the APA application conforms to the arm’s length principle, a ‘Notice of Tax Related Issues’ consenting to the Taxpayer’s submission of a formal APA application will be issued. The Taxpayer must then submit a ‘Formal Application Letter for an Advance Pricing Arrangement’.

Language The documentation should be submitted in Mandarin Chinese.



General Taxpayers are required to coordinate with the Tax authorities and make any adjustments to the proposed TP method during the stage of analysis and evaluation. A formal application will not be accepted until an agreement has been reached.

Taxpayers applying for a unilateral APA must submit all above mentioned information and documentation to their local tax authority. Taxpayers applying for bilateral or multilateral APAs must submit all above mentioned information and documentation to both the State Administration of Taxation as well as the relevant local tax authority. For APAs involving two or more provinces, autonomous regions, municipalities or cities with independent planning, or involve both the state and local tax bureaux, the SAT shall be the designated Tax authority.





An Annual Compliance Report (‘ACR’) is required to be filed with the Tax authorities within six months following each tax year end. The ACR must include:

■■ documentation of the relevant business operations and implementation of the APA;

■■ any need to amend or terminate the APA; and

■■ any unsettled issues or adverse issues expected to occur.

The Tax authorities will monitor the Taxpayer’s implementation of the APA on an annual basis, with major areas of monitoring to include compliance with the provisions and requirements of the APA, whether the information provided in the ACR reflects the actual operations of the Taxpayer, and whether the assumptions in the APA are still valid.

Renewal procedure

Applications for the renewal of APAs are required to be lodged within 90 days prior to the expiration of the existing APA. The Taxpayer must submit an ‘Advance Pricing Arrangement Renewal Application’; a report specifying the implementation status of the of the existing APA; an explanation of any substantial changes to the facts or operational environment in the existing APA; and a forecast for the years covered by the renewal.



MAP PROGRAM

KEY FEATURES

Competent authority

The State Administration of Taxation (‘SAT’)

Relevant provisions

Public Notice on Issuing the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Agreement Procedures (Public Notice of the SAT [2017] No. 6)

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which China is signatory. Specifically, the SAT provides the following conditions for accepting an application:

■■ the application is made within the time period specified in the DTT;

■■ the subject matter of the application is a breach of DTT provision(s) that has already occurred or will likely occur;

■■ the fact and evidence provided by the applicant can prove or cannot reasonably eliminate the suspicion that the treaty partner country has breached a DTT provision; and

■■ the matter subject to the application is not covered by article 19 of the applicable DTT.


Application for a MAP must be made within a reasonable period of time from the first notification of the action resulting in taxation not in accordance with the provisions of the DTT. If the application is submitted in person, the application date is deemed to be the submission date; if the application is submitted by email, the application date is the date that the SAT receives the application.





Taxpayers must submit an ‘Application for Initiating Mutual Agreement Procedures Concerning Special Tax Adjustment’ and relevant information in writing to the SAT.

Language Materials must be submitted in both Mandarin Chinese and English.



While the litigation of issues that would generally be covered under MAP are not frequently litigated in China, MAP requests may coincide with the litigation under the domestic procedures available.


STATISTICS

APA There were 194 APA applications at the application or signing stage at the end of 2016. 14 APAs were signed during 2016. The PRC has been negotiating APAs since the mid-1990s, with the first unilateral and bilateral APAs signed in 1998 and 2005, respectively.

MAP China had a total of 108 active MAP applications as of 31 December 2016. 78 MAP cases were negotiated during 2016. The average time needed to close MAP cases is 26 months for transfer pricing cases, and 16 months for other cases.



Albania

Algeria

Armenia

Australia

Austria

Azerbaijan

Bahrain

Bangladesh

Barbados

Belarus

Belgium(IV)

Bosnia Herzegovina

Brazil

Brunvei

Bulgaria



Cambodia

Canada

Chile(IV)

Croatia

Cuba

Cyprus

Czech Republic

Denmark(IV)

Ecuador(IV)

Egypt

Estonia

Ethiopia(IV)

Finland

France(IV)

Georgia

Germany

Greece

Hong Kong(IV)

Hungary

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Jamaica

Japan

Kazakhstan

Korea (Republic of)

Kuwait

Kyrgyzstan

Laos

Latvia

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mauritius

Mexico

Moldova

Mongolia

Montenegro

Morocco

Nepal

Netherlands

New Zealand

Nigeria

Norway

Oman

Pakistan

Papua New Guinea

Philippines

Poland

Portugal(VI)

Qatar

Romania(IV)

Russia(IV)

Saudi Arabia

Serbia

Seychelles

Singapore

Slovenia

South Africa

Spain

Sri Lanka

Sudan

Sweden

Switzerland(IV)

Syria

Tajikistan

Thailand

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan

Ukraine


United Kingdom(IV)

United States

Uzbekistan

Venezuela

Vietnam

Zambia

Zimbabwe(IV)


NOTES










COLOMBIA

APA PROGRAM

KEY FEATURES

Competent authority

Colombian Tax Administration (‘DIAN’) and the General Director of DIAN delegated by the Finance Minister (‘Tax authorities’).

Relevant provisions

Article 260-10 of the Colombian Tax Code, modified by Article 112 Law 1819 of 2016; Decree 1625 of 2016; and Decisión 578 CAN.



Acceptance criteria

Requests are more likely to be successful if:

■■ transfer pricing issues are complex and uncertainty exists as to how the arm’s length standard should be applied; and/or

■■ there is a high probability of double taxation without an APA.


The Tax authorities must respond to the Taxpayer within nine months from the date of filing the APA application, and two years to put an agreement to the Taxpayer.




APAs may only cover the fiscal year in which they are requested and the immediately preceding year.



Overview No specific guidance.




COLOMBIA (cont’d)



The application should set out general information, including:

■■ the Taxpayer’s name, business address, tax identification number and country of residency;

■■ a description of the principal activities of the group, including the place(s) where the activities are carried out;

■■ a description of the transaction(s) between the Taxpayer and related business;

■■ financial and profit and loss statements, including the costs and expenses incurred by the Taxpayer or related parties that have a contractual or business relationship with the Taxpayer;

■■ the currency used in the principal transactions between the Taxpayer and related parties;

■■ the transaction(s) the Taxpayer seeks to cover in the proposed APA;

■■ a detailed description of the functions and activities carried out by the Taxpayer and the Colombian or non-resident related parties that maintain a contractual or business relationship with the Taxpayer, including a description of the assets held and the risks borne by each of the parties;

■■ the TP method proposed by the Taxpayer to determine the transfer price, including the criteria and other objective elements used to demonstrate that the method is appropriate for the covered transaction(s) for which the Taxpayer is requesting an APA (the Taxpayer must submit financial information corresponding to the fiscal years to be covered and apply the proposed TP method to its intercompany transactions);

■■ information on comparable transactions or companies, indicating the reasonable adjustments made to eliminate differences; and

■■ any other information or documentation necessary for as required by the Tax authorities.

Language The documentation should be submitted in Spanish.






Either the Tax authority or the Taxpayer can modify the terms of the agreement:

■■ The Taxpayer must notify the Tax authorities whether a critical assumption has been realised and submit supporting documentation with a proposed course of action (e.g., revision of the APA) within two months and the Tax authorities may, within two months as from the notification date, in a reasoned ruling approve or reject the amendment.

■■ If the Tax authorities determine that significant changes have arisen in the assumptions considered in the initial APA, it may notify the Taxpayer accordingly. The Taxpayer shall have one month as from the notification date to prepare a duly supported amendment or to explain and verify the reasons for considering that there have been no substantial changes justifying the amendment of the APA. If by the end of this period the Taxpayer has not submitted the relevant amendment or has not explained in writing and sufficiently verified the reasons for not doing so, the Tax authorities will cancel the APA, by means of a duly reasoned ruling, leaving it ineffective as from the taxable year in which the change in circumstances occurred.

■■ The Tax authorities may cancel a unilateral APA where the Taxpayer fails to comply with one or more of the provisions of the APA.

Renewal procedure


COLOMBIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority


Relevant provisions

There are no specific provisions for the MAP procedure in domestic law. Taxpayers must rely on the MAP provisions under DTTs.

Acceptance criteria



There are no prescribed time limits to request a MAP under domestic law. Taxpayers must refer to the relevant DTT for the applicable time limits in which to request a MAP.









STATISTICS

APA Statistics have not been made publicly available.

MAP Statistics have not been made publicly available.

COLOMBIA (cont’d)




Bolivia

Canada

Chile

Czech Republic(IV)

Ecuador

India(IV)

Korea (Republic of)(IV)

Mexico(IV)

Peru

Portugal

Spain

Switzerland

COLOMBIA (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Croatian Tax Administration (‘TA’)

Relevant provisions

Ordinance No. 42/2017, as published in the Official Gazette.



Acceptance criteria



Pre-filing meeting requests must be filed no later than six months prior to the transaction(s) intended to be covered.


Filing fee The filing fee for unilateral APAs range from HRK 15,000 to HRK 150,000 (approx. USD 2,400 to 24,000) depending on the Taxpayer’s turnover as stated in the most recent tax return. For bilateral APAs, an additional HKR 50,000 (approx. USD 8,000) is payable, and for multilateral APAs an additional HRK 100,000 (approx. USD 16,000) is payable.


Rollback to prior years is not available.


CROATIA



Overview Taxpayers are required to request a pre-filing meeting with the TA in a written statement containing the following information:

■■ name of the Taxpayer, tax number and contact person for communication with the TA;

■■ name of the tax advisor that will be involved in the APA application process;

■■ a list of the related parties to be the subject of the APA, and the countries in which they are established or resident;

■■ type of APA sought;

■■ a brief outline of the organisational structure and business of the Taxpayer and related parties;

■■ a brief description of the transaction(s) that will be the subject of the APA and the value of the transaction(s);

■■ anticipated date that the transaction(s) will occur; and

■■ proposed TP method.

The TA will schedule a pre-filing meeting if it determines an APA is appropriate in the circumstances of the Taxpayer. The pre-filing meeting will involve a discussion of the following:

■■ purpose of the APA;

■■ selection process used to determine the TP method;

■■ likelihood that difficulties or doubts regarding the interpretation or application of the APA will significantly increase the risk of double taxation or non-payment;

■■ scope of the documentation and the analysis required for the conclusion of the APA;

■■ whether the APA could affect the tax treatment of transactions from previous periods if the facts and transaction(s) that is the subject of the APA is equivalent to those of previous tax periods;

CROATIA (cont’d)


CROATIA (cont’d)


Overview (cont’d) ■■ whether the Taxpayer or a related party is currently subject to a TP audit for previous years for the same or similar issues as those intended to be covered by the APA;

■■ details of the transaction(s), business forecasts and plans;


■■ key deadlines of the APA application process;

■■ time required to conclude the APA; and

■■ proposed validity period of the APA.

The TA may request further meetings before making a decision as to whether to invite the Taxpayer to submit a formal APA application.




CROATIA (cont’d)



Taxpayers are required to submit a ‘Statement of intent to conclude an APA’ to the TA, including the following information:

■■ name of the Taxpayer, tax number and contact person for communication with the TA;

■■ name of the tax advisor that will be involved in the APA application process;


■■ general information on the transaction(s) with related parties (e.g., description, type, amount, values, and terms);

■■ data on all related parties to the APA (e.g., name, location of headquarters, and tax number);

■■ a description of the transaction(s) to be the subject of the APA and a description of the products, works or contracts which are the basis for the transaction(s) to be the subject of the APA; and

■■ the proposed period of validity of the APA.

If the Taxpayer requests a bilateral or multilateral APA, the following additional information must be included:

■■ information on the appropriate legal basis for the conclusion of the APA (a tax treaty or other international agreement);

■■ whether the Taxpayer or related parties have been or are currently subject to any audits, where the transactions involved are similar to those that are the subject of the APA application;

■■ an indication of whether the APA may affect related parties from non-participating countries;

■■ whether the Taxpayer or related parties have informed any relevant foreign tax authorities of the intention to conclude the APA;

■■ whether the Taxpayer or related parties have concluded an APA in another country that is related to the transactions covered by the APA; and

■■ translation of the formal APA application into English.


CROATIA (cont’d)



The Taxpayer is required to submit the following supporting documentation in the formal APA application:

■■ a graphical representation of the legal and ownership structure of the group of related parties with which the Taxpayer is involved;

■■ a description of the business and business strategy of the group of related parties, together with a general description of the capital, assets, significant contracts, financial activities within the group, and a description of the group’s transfer pricing policy;

■■ consolidated annual financial statements of the group of related parties for the previous three tax periods;

■■ annual financial statements of related parties participating in transactions covered by the APA, including tax returns for the previous three tax periods;

■■ a proposal and explanation of the selected TP method , as well as documentation supporting the justification of the selection, accompanied by detailed analysis, and information on comparable prices;

■■ financial and economic analysis to demonstrate the appropriateness of the selected TP method, including the development of the planned transaction(s) that are the subject of the APA;


■■ a proposal to make any adjustments should there be a change to the critical assumptions on which the APA is based, where the actual outcome is different from the one provided for in the APA; and

■■ any other information that may have an impact on the selected TP method for determining the transfer pricing for the transaction(s) that will be the subject of the APA.

The TA may invite the Taxpayer to provide additional information or explanations before making a decision to accept or reject the APA application. The Taxpayer will be notified in writing the outcome of the APA application.


CROATIA (cont’d)


Language Documentation must be submitted in Croatian. Bilateral and multilateral APA applications must be accompanied by English translations.



General The TA follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer is required to submit annual reports on the implementation of the APA within the time limit for submitting an annual income tax return. The annual report must establish the following:

■■ whether the Taxpayer has complied with the terms of the APA;

■■ whether the information stated in the APA application, annual reports and any accompanying documentation still apply;

■■ whether there have been any significant changes in the facts or circumstances affecting the anticipated result of the APA;

■■ whether the TP method is applied accurately and consistently in accordance with the terms of the APA; and

■■ whether the critical assumptions underlying the TP method still apply.

Renewal procedure

The Taxpayer may apply for the renewal of an APA by submitting a request for the extension of the APA six months prior to the expiry of the initial APA term.


CROATIA (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

Croatian Tax Administration (‘TA’)

Relevant provisions

There are no specific provisions for MAP in domestic law. Taxpayers must rely on the MAP provisions under DTTs or the EU Arbitration Convention (90/436/EEC).

Acceptance criteria



There is no specific guidance in domestic law. Taxpayers have three years to present a case to the TA under the EU Arbitration Convention.






CROATIA (cont’d)




Arbitration As Croatia is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.


STATISTICS

APA Statistics on APAs have not been made publicly available.

MAP Croatia has a total of 12 active MAP applications as of 31 December 2016.


Albania

Armenia

Austria

Azerbaijan(IV)

Belarus

Belgium

Bosnia-Herzegovina

Bulgaria

Canada

Chile

China

Czech Republic

Denmark

Estonia

Finland(IX)

France

Georgia(IV)

Germany

Greece

Hungary

Iceland

India(IV)

Indonesia

Iran

Ireland

Israel

Italy

Jordan

Korea (Republic of)

Kosovo

Kuwait

Latvia

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mauritius

Moldova

Montenegro

Morocco(IV)

Netherlands

Norway(IX)

Oman(IV)

Poland

Portugal

Qatar

Romania

Russia

San Marino(IV)

Serbia

Slovakia

Slovenia

South Africa

Spain

Sri Lanka(IX)

Sweden(IX)

Switzerland

Syria

Turkey

Turkmenistan(IV)

Ukraine

United Kingdom(IV)



CROATIA (cont’d)

NOTES










CZECH REPUBLIC

APA PROGRAM

KEY FEATURES

Competent authority

International Taxation Unit of General Financial Directorate (‘Tax authorities’)

Relevant provisions Section 38nc of the Income Tax Act; and

Decree D-333.



Acceptance criteria No specific guidance.


APAs will only cover transaction for years that a Taxpayer is yet to file a tax return.

APA term limits No specific guidance.

Filing fee The Taxpayer must pay an administration fee of CZK 10,000 (approx. USD 400) before the APA has been concluded.


Rollback is not available; however, the Taxpayer may assume that a method which has been consistently applied in the past and which is approved by the tax authorities for future transactions will be accepted for past tax periods.









The application should contain at least the following information:

■■ the names, addresses and tax identification numbers of all parties involved in the transaction, including non-residents;

■■ a description of the organisational structure, including the elements of the entity abroad;

■■ a description of the commercial activities of the participating persons;

■■ a description of the commercial transaction(s) covered by the APA;

■■ the tax period for which the APA should be applicable;

■■ a description and documentation of the TP method through which the price was determined, including all facts related to the commercial transaction;

■■ critical assumptions; and

■■ the proposed wording of the ruling.

Language The documentation should be submitted in Czech.



General The Tax authorities follow a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


There are no post-agreement annual filing procedures.

Renewal procedure


CZECH REPUBLIC (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

International Taxation Unit of General Financial Directorate (‘Tax authorities’)

Relevant provisions

There are no specific provisions for MAP in domestic law. Taxpayers must rely on the MAP provisions under DTTs or the EU Arbitration Convention (90/436/EEC).

Acceptance criteria



There are no prescribed time limits to request a MAP under domestic law. Taxpayers must refer to the relevant DTT for the applicable time limits in which to request a MAP. Furthermore, Taxpayers have three years to present a case to the Tax Authorities under the EU Arbitration Convention.









MAP will generally not be initiated when a domestic litigation procedure is still under way.

Arbitration As the Czech Republic is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 40 APA application requests made in 2015 and 27 completed applications. The average completion time was 33 months for bilateral and multilateral APAs. The Tax authorities have had an APA program since 2006.

MAP The Czech Republic had a total of 46 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 35 months for transfer pricing cases, and 17 months for other cases.





Albania

Armenia

Australia

Austria

Azerbaijan

Bahrain(IV)

Barbados(IV)

Belarus

Belgium

Bosnia-Herzegovina

Brazil

Bulgaria

Canada

Chile(IV)

China

Colombia(IV)

Croatia

Cyprus

Denmark(IV)

Egypt

Estonia

Ethiopia

Finland

France

Georgia

Germany

Greece

Hong Kong(IV)

Hungary

Iceland

India

Indonesia

Iran(IV)

Ireland

Israel

Italy

Japan

Jordan

Kazakhstan

Korea (Democratic Republic of)

Korea (Republic of)

Kuwait

Latvia

Lebanon

Lichtenstein(IV)

Lithuania

Luxembourg(IV)

Macedonia

Malaysia

Malta

Mexico

Moldova

Mongolia

Morocco

Netherlands

New Zealand

Nigeria

Norway

Pakistan(IV)

Panama(IV)

Philippines

Poland

Portugal

Romania

Russia

Saudi Arabia(IV)

Serbia & Montenegro

Singapore

Slovakia

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Syria

Tajikistan

Thailand

Tunisia

Turkey

Ukraine


United Kingdom

United States

Uzbekistan

Venezuela

Vietnam


NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Danish Tax Office (‘SKAT’)

Relevant provisions

Guidance ‘CD.11.1–11.16 Advance Pricing Agreements’ available on the SKAT website (Danish only).


Unilateral, bilateral and multilateral APAs are available.

Acceptance criteria

There are no requirements as to the complexity or the value of the transactions; however, SKAT may ask that more transactions and/or more affiliates be included to accept an APA.



APA term limits While there are no general term limits, APAs will typically run for five years.



Rollback is available on request, although rollbacks will not prevent SKAT from initiating tax audits of previous income periods.

Collateral issues If SKAT has already initiated a tax audit, it may decide not to accept an APA application.

DENMARK



Overview SKAT recommends pre-filing meetings with the Taxpayer. To initiate pre-filing the Taxpayer should engage in informal dialogue with SKAT and take part in pre-filing meetings to discuss the transactions to be covered in the APA and the information that will be required in the formal application. Any foreign tax authorities relevant to the discussions should also be involved.


While there is no specific guidance, SKAT is often willing to discuss questions on an anonymous basis at their discretion.



After pre-filing meetings, the Taxpayer should prepare and file an APA application, which must include:

■■ a description of the enterprise and the market;

■■ a description of the controlled transaction(s), including a functional analysis;

■■ a comparability analysis;

■■ a description of the adopted TP method(s);


■■ annual reporting on compliance (proposed by the taxpayer, typically a compliance statement made in connection with filing income tax returns).

Language The documentation may be submitted in Danish, Norwegian, Swedish, or English.


DENMARK (cont’d)



General SKAT follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must file an annual compliance statement, stating that the basis and conditions for concluding the APA remains unchanged and the Taxpayer is not in breach of any critical assumptions. This should be filed together with the income tax return.

Renewal procedure

Existing APAs may be extended provided that the basis and conditions for concluding the APA remain materially unchanged, and the Taxpayer notifies SKAT in due time before expiry.

DENMARK (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Danish Tax Office (‘SKAT’)

Relevant provisions


Acceptance criteria



There are no prescribed time limits to request a MAP under domestic law. Taxpayers must refer to the relevant DTT for the applicable time limits in which to request a MAP.

Taxpayers have three years to present a case to SKAT under the EU Arbitration Convention (90/436/EEC).







It is possible to submit a request for MAP even where there is an ongoing domestic litigation. A case may be put on hold during a MAP, but in some cases the litigation will continue in parallel with MAP negotiations.

Arbitration As Denmark is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.


DENMARK (cont’d)


STATISTICS

APA There were 19 pending APA applications during income year 2015 and eight completed applications. SKAT has had an APA program since 1991. Although APAs are generally available in Danish law and via the MAP provisions in the Danish tax treaty network, Denmark does not have a formal APA program.

MAP Denmark had a total of 178 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 31 months for transfer pricing cases, and 51 months for other cases.

DENMARK (cont’d)


Argentina

Australia

Austria

Azerbaijan

Bangladesh

Belgium

Bermuda

Brazil

British Virgin Islands

Bulgaria

Canada

Cayman Islands

Chile

China(IV)

Croatia

Cyprus

Czech Republic(IV)

Egypt

Estonia

Faroe Islands

Finland

Georgia

Germany

Ghana

Greece

Guernsey

Hong Kong

Hungary(IV)

Iceland

India

Indonesia

Ireland

Isle of Man

Israel

Italy

Jamaica

Japan

Jersey

Kenya

Korea (Republic of)

Kuwait(IV)

Latvia

Lithuania

Luxembourg

Macedonian

Malaysia

Malta

Mexico

Montenegro

Morocco

Netherlands

New Zealand

Nordic countries

Norway

Pakistan

Philippines

Poland

Portugal

Romania

Russia

Serbia

Singapore

Slovakia

Slovenia

South Africa

Sri Lanka

Sweden

Switzerland(I)

Taipei

Tanzania

Thailand

Tunisia

Turkey

Uganda

Ukraine

United Kingdom

United States

Venezuela

Vietnam

Zambia



DENMARK (cont’d)

NOTES










FINLAND

APA PROGRAM

KEY FEATURES

Competent authority

Finnish Tax Administration

Relevant provisions

Informal guidelines are available on the Finnish Tax Administration’s website.


Unilateral, bilateral, and multilateral APAs are available. Taxpayers must rely on the MAP provisions in DTTs to which Finland is signatory to secure a bilateral or multilateral APAs. Unilateral advance rulings on tax treatment are also available from the Tax Administration or Central Tax Board.

Acceptance criteria

There is no specific guidance on the acceptance criteria for bilateral or multilateral APAs. Advance rulings are more likely to be given in circumstances where:

■■ resolving the issue is important for the application of tax law in similar cases;

■■ the ruling will provide consistency in the assessment of tax; and

■■ the Taxpayer submits a sufficiently detailed description of the case with some uncertainty of the tax treatment.


There is no specific guidance for bilateral or multilateral APAs. Applications for advance rulings must be filed before the end of the filing due date of the tax return (within four months after the financial year end).

APA term limits There is no specific guidance for bilateral or multilateral APAs. Advance rulings are granted for the period ending at the end of the tax year following the year the ruling was granted.

Filing fee There is no filing fee for bilateral or multilateral APA application. Fees for an advance rulings are payable upon receipt of the ruling and the amount will depend on the complexity of the ruling.


There is no specific guidance on rollback availability for bilateral or multilateral APAs. Advance rulings are only issued to cover future years.



FINLAND (cont’d)


Overview A pre-filing meeting is recommended for bilateral or multilateral APAs. For advance rulings, the issues to be covered under the ruling may be discussed between the Taxpayer and the Tax Administration for the purpose of coming to a mutual agreement.





The informal guidelines recommend the following to be included in a bilateral or multilateral APA application:

■■ functional analysis;

■■ details of the proposed TP method;

■■ relevant financial information;

■■ relevant agreements; and

■■ critical assumptions (national legislation, DTT terms, import restrictions, financial circumstances, market information, exchange rates, applicable interest rates, credit ratings and capital structure).

The Taxpayer files the application, after which it is at the discretion of the Tax Administration to decide on the procedure to be taken.

For advance rulings, the Taxpayer is required to provide a written application, including:

■■ a precise question to which the ruling should give an answer; and

■■ factual background and analysis of the question at hand.

Further information may be requested by the Tax Administration or Central Tax Board.

Language Finnish and Swedish are official languages, but the informal guidelines recommend filing in English.




General The Finnish Tax Administration follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


There is no specific guidance for bilateral or multilateral APAs. For advance rulings, there are no annual compliance requirements.

Renewal procedure

There is no specific guidance for the renewal of bilateral or multilateral APAs. For advance rulings, an application for a renewal is treated as a new ruling request.

FINLAND (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Large Taxpayers’ Office of the Ministry of Finance (‘Tax authority’)

Relevant provisions

Article 89 of the Act on Tax Procedure

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Finland is signatory.


Most of Finland’s DTTs permit a Taxpayers to present their case to the Tax authority of the Ministry of Finance within three years from the first notification to the taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. Taxpayers have three years to present a case to the Tax authority under the EU Arbitration Convention (90/436/EEC).



Taxpayers must submit a written application to the Tax authority. There is no prescribed form or documentation requirements for the application.

Language Finnish and Swedish are official languages, but the informal guidelines recommend filing in English.



Taxpayers may simultaneously initiate domestic litigation proceedings and request a MAP; however, the Tax authority may put the MAP request on hold until there is a final resolution of the litigation in Finland.

FINLAND (cont’d)



Arbitration As Finland is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention (90/436/EEC) also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA Starting from 2015 Finland has granted six APAs. Currently 13 applications are being processed.

MAP Finland had a total of 59 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 31 months for transfer pricing cases, and 47 months for other cases.

FINLAND (cont’d)


Argentina

Armenia

Australia

Austria

Azerbaijan

Barbados

Belgium

Bermuda

Bosnia and Herzegovina

Brazil


Bulgaria

Belarus

Canada

Cayman Islands

China

Croatia

Cyprus(IV)

Czech Republic

Denmark

Egypt

Estonia

France

Germany

Georgia

Greece

Guernsey

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Japan

Kazakhstan

Kyrgyzstan

Latvia

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mexico

Moldova

Montenegro

Morocco

Netherlands

New Zealand

Norway

Oman

Pakistan

Philippines

Poland(IV)

Romania

Russia

Serbia

Singapore

Slovakia

Slovenia

South Africa

South Korea

Spain(IV)

Sri Lanka

Sweden

Switzerland

Tajikistan(IV)

Tanzania

Thailand

Turkey

Turkmenistan(V)

Ukraine


United Kingdom

United States

Uruguay(IV)

Uzbekistan

Vietnam

Zambia



FINLAND (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Direction Générale des Finances Publiques (‘Tax authority’)

Relevant provisions

Article L.80 B 7° of the French Tax Procedure Code; and Administrative guidelines BOI-SJ-RES-20-10-20170201.



Acceptance criteria

Bilateral APAs may only be concluded with jurisdictions signatory to a DTT with France containing the MAP provisions. Unilateral APAs may be available where:

■■ the relevant DTT does not provide for a MAP and bilateral APAs are accordingly not possible;

■■ the transactions involve a significant number of countries;

■■ for simple but frequent issues; and

■■ for SMEs.


The APA procedure must be initiated by the Taxpayer at least six months before the beginning of the first financial year it is anticipated to cover.

APA term limits There is a five-year maximum term for an APA and a minimum of three years.



APAs are available for future years only and no rollback is available.

Collateral issues Ongoing tax audits will not prevent the Taxpayer from initiating an APA for future financial years. An APA request will also not suspend any ongoing audits. If the Taxpayer and the Tax authority have reached a compromise in respect of a tax audit, or if after litigation a position has been taken by the courts, the Taxpayer may attempt to extend the corresponding solutions to future financial years through an APA.

FRANCE



Overview Prior to a formal APA application, there should be an informal meeting with the Tax authority to discuss:

■■ the appropriateness of an APA in the circumstances;

■■ the type of information required in the application;

■■ the timeline of the application procedure; and

■■ any other questions relating to the application.





Working meetings will take place during which the Taxpayer should present supporting documentation, including:

■■ comparables justifying the proposed TP method;

■■ the structure of the group to which the Taxpayer belongs;

■■ a description of the operations performed within the group;

■■ financial and tax data relating to the three last years and any other document justifying the proposed TP method; and

■■ APAs obtained from other foreign tax authorities.

The Taxpayer may not refuse to provide information requested on the grounds that it is confidential.

Language The documentation should be submitted in French, unless otherwise agreed with the Tax authority during informal meetings.

FRANCE (cont’d)



SME provisions A simplified APA procedure is available for Taxpayers that meet the following criteria:

■■ less than 250 employees and a turnover of less than EUR 50m (approx. USD 58.9m), or total assets worth less than EUR 43m (approx. USD 50.65m)

■■ 25 percent or more of the capital or voting rights is not held by one or more companies that do not meet the first condition

These thresholds relate to the financial year preceding the one in which the APA is requested.


General The Tax authority follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must lodge an annual report providing evidence of the proper application of the APA.

Renewal procedure

Applications for the renewal of APAs are required to be lodged at least six months before expiry. Negotiations on the renewal of an APA may be less onerous if there are no major changes to the terms of the existing APA.

FRANCE (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Direction Générale des Finances Publiques (‘Tax authority’)

Relevant provisions

BOI-INT-DG-20-30-20120912: Common provisions – Conventional law – Mutual proceedings for the elimination of double taxation

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which France is signatory.


Most of France’s DTTs permit a Taxpayer to present their case to the Tax authority within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. Taxpayers have three years to present a case to the Tax Authority under the EU Arbitration Convention (90/436/EEC).



Taxpayers are required to submit a request for MAP, which includes the following:

■■ identification of the Taxpayer and of the related party;

■■ detailed information regarding the facts creating a situation of double taxation;

■■ identification of relevant taxes and tax years or financial years;

■■ a copy of the notice of reassessment;

■■ detailed information regarding any litigation launched by the taxpayer; and

■■ the commitment of the Taxpayer to answer to reasonable queries of the Tax authority.


FRANCE (cont’d)




Taxpayers may simultaneously request a MAP and initiate domestic litigation proceedings; however, if through the MAP a solution is reached, the solution can only be implemented if litigation is abandoned.

Arbitration As France is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive of 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 26 APA application requests in 2016 and 10 completed applications. The average time of completion of the APA negotiations is around 25 months.

MAP France had a total of 837 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 39 months for transfer pricing cases, and 31 months for other cases.

Albania

Algeria

Andorra

Argentina

Armenia

Australia

Austria

Azerbaijan

Bahrain

Bangladesh

Belgium

Benin

Bolivia

Bosnia

Botswana

Brazil

Bulgaria

Burkina Faso

Cameroon

Canada

Central African Republic



FRANCE (cont’d)


Chile

China

Congo

Croatia

Cyprus

Czech Republic

Ecuador

Egypt

Estonia

Ethiopia

Finland

French Polynesia

Gabon

Georgia

Germany

Ghana

Greece

Guinea

Hong Kong

Hungary

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Ivory Coast

Jamaica

Japan

Jordan

Kazakhstan

Kenya

Korea (Republic of)

Kosovo

Kuwait

Latvia

Lebanon

Libya

Lithuania

Luxembourg

Macedonia

Madagascar

Malawi

Malaysia

Mali

Malta

Mauritania

Mauritius

Mexico

Monaco

Mongolia

Montenegro

Morocco

Namibia

Netherlands

New Caledonia

New Zealand

Niger

Nigeria

Norway

Oman

Pakistan

Panama

Philippines

Poland

Portugal

Qatar

Romania

Russia

Saint Martin

Saint Pierre and Miquelon

Saudi Arabia

Senegal

Serbia

Singapore

Slovakia

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Syria

Thailand

Trinidad & Tobago

Tunisia

Turkey

Ukraine


United Kingdom

United States

Uzbekistan

Venezuela

Vietnam

Zambia

Zimbabwe

FRANCE (cont’d)

NOTES










GEORGIA

APA PROGRAM

KEY FEATURES

Competent authority

Georgian Revenue Service (‘Revenue Service’)

Relevant provisions

Articles 126-129.1 of the Georgian Tax Code (‘GTC’); and Chapter V of Decree 423 of the Finance Minister on the Approval of the Instructions on International Transfer Pricing, dated 18 December 2013 (‘Decree 423’).


Unilateral, bilateral, and multilateral APAs are available; however, Decree 423 is only applicable to unilateral APAs. Procedures relating to bilateral and multilateral APAs may differ from those provided for under Decree 423, and the Revenue Service will provide guidance on these at the request of the Taxpayer at the pre-filing stage.

Acceptance criteria

Georgian Taxpayers are eligible to apply for unilateral APAs provided that the covered transaction(s) exceed or are expected to exceed GEL 50m (approx. USD 20m).


An application for a unilateral APA must be made in advance of the proposed covered transaction(s) taking place.

APA term limits There is a three-year maximum term for a unilateral APA.







Overview Taxpayers may make requests for pre-filing meetings in writing to the Head of the Revenue Service. The Revenue Service will respond to the request within 14 days of receipt to arrange the pre-filing meeting with the Taxpayer. A Taxpayer should be prepared to express its preliminary views on an appropriate pricing mechanism, and other information required for negotiations, including:

■■ details of the Taxpayer’s activities and the industry in which the covered transaction will take place;

■■ approximate values of the proposed covered transactions;

■■ the scope of the issues to be covered by the APA;

■■ the proposed covered period;

■■ an explanation of how the Taxpayer proposes to demonstrate that its proposal is in accordance with the market principle; and

■■ a thorough description of any other relevant facts and circumstances.

Taxpayers may use the pre-filing meetings for the following purposes:

■■ assess or mitigate any risk to confidential information provided in the APA application, or information provided to the Revenue Service that could be used against the Taxpayer in future audits should the APA application be rejected, or the potential undermining of previous transfer pricing practices adopted in prior years;

■■ assess the likelihood of an agreement being reached with the Revenue Service on the application of the market principle to the proposed covered transactions; and

■■ discuss opportunities for bilateral or multilateral APAs.

Any views expressed by either party during the pre-filing meeting(s) will not be binding on either party. The Revenue Service will communicate with the Taxpayer within 14 days after the pre-filing meeting(s) the likelihood of an application being accepted.



GEORGIA (cont’d)




Taxpayers are required to submit an application to the Revenue Service in writing, and include the following:

■■ details of the proposed covered transactions;

■■ details of the associated enterprises that are party to the proposed covered transaction(s) (including tax residence);

■■ a description of the Georgian Taxpayer entity’s business model and the industry relevant to the covered transaction(s);

■■ the proposed scope and covered period;

■■ the relevant details of the proposed covered transaction(s), including:

– the details of the proposed comparable uncontrolled transaction(s) (or criteria for selection of comparable controlled transaction(s) and proposed source of information), supported by comparability analysis in accordance with art 127(4) of the GTC and art 5 of Decree 423

– the proposed comparability adjustment

– the proposed TP method, selected in accordance with art 8 of Decree 423

– where applicable, the proposed tested party selected in accordance with art 9 of Decree 423;

■■ relevant financial data for the previous three years and calculations based on the application of the proposed TP method (if the outcome of these calculations differ from outcome in the tax returns of the same years, the Taxpayer should provide explanations for the variance);

■■ proposed critical assumptions to be included in the APA; and

■■ any other information that may be relevant to the Revenue Services’ assessment of the application.

Language The documentation should be submitted in Georgian or English. Where documents are submitted in English, the Revenue Service may request Georgian translations of specific documents.


GEORGIA (cont’d)



General The Georgian Revenue Service follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


Taxpayers are required to complete and file an ‘Annual Compliance Report’ for each of the years covered by the APA. Taxpayers will be notified by the Revenue Service of the form and filing date for the Annual Compliance Report.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry. An APA renewal request will go through the same stages as the initial APA request. The Revenue Service will renew an arrangement if the following terms are met:

■■ there have been no material changes in the facts and circumstances and relevant critical assumptions are still applicable;

■■ the Taxpayer entity has complied with the requirements of the existing APA; and

■■ the Revenue Service considers it appropriate to renew the arrangement.

GEORGIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Georgian Revenue Service

Relevant provisions

There are no specific provisions for MAP in domestic law. Taxpayers must rely on the MAP provisions under DTTs.

Acceptance criteria












STATISTICS

APA There are no statistics publicly available.

MAP There are no statistics publicly available.

GEORGIA (cont’d)


GEORGIA (cont’d)



Armenia

Austria

Azerbaijan

Bahrain(IV)

Belarus(IV)

Belgium(II)

Bulgaria

China

Croatia(IV)

Cyprus(IV)

Czech Republic

Denmark

Egypt(IV)

Estonia

Finland

France

Germany(IV)

Greece

Hungary(IV)

Iceland(IV)

India(IV)

Iran

Ireland

Israel

Italy

Japan

Kazakhstan


Kuwait(IV)

Latvia

Liechtenstein(IV)

Lithuania

Luxemburg

Malta

Netherlands(I)

Norway(IV)

Poland

Portugal(IV)

Qatar

Romania

San Marino(IV)

Serbia(IV)

Singapore

Slovak Republic(IV)

Slovenia(IV)

Spain

Sweden(IV)

Switzerland

Turkey

Turkmenistan

Ukraine


United Kingdom

United States

Uzbekistan

NOTES










GERMANY

APA PROGRAM

KEY FEATURES

Competent authority

Bundeszentralamt für Steuern (‘Federal Central Tax Office’, or ‘Tax authority’)

Relevant provisions

Ministry of Finance Ordinance of 5 October 2006 (BMF, IV B 4-S 1341-38/06)


Bilateral and multilateral APAs are available. Unilateral binding statements from the Tax authority can be obtained in the form of advance rulings, but are applicable only in cases questioning the interpretation of law. For technical matters, such as the acceptance of specific TP methods, advance rulings are not available.

Acceptance criteria

A formal (written) request to the Tax authority signed by the Taxpayer or an authorised representative is required, in which the Taxpayer must express an interest in conducting such procedure (materiality threshold). The request has to include all relevant information, as described in more detail below and the Taxpayer must be eligible under the respective DTT (treaty protected). An ongoing audit does not hinder an APA request.


The APA will generally commence from the beginning of the fiscal year in which the formal request is filed. However, earlier commencement dates are allowed if the APA is filed before a tax return has been submitted for an earlier fiscal year and the statutory deadline for submission has not yet expired. Earlier commencement dates may be negotiated with the consent of the other relevant foreign tax authorities.

APA term limits The Tax authority suggests a three-year minimum and a five-year maximum term for an APA.


GERMANY (cont’d)


Filing fee APA application fee EUR 20,000 (approx. USD 23,550)

APA renewals EUR 15,000 (approx. USD 17,650)

Modification of application EUR 10,000 (approx. USD 11,750)

There is a 50 percent reduction in fees for small Taxpayers (Taxpayers with intercompany tangible goods transactions below EUR 5m (approx. USD 5.9m) and other intercompany transactions below EUR 500,000 (approx. USD 588,600)).


Rollback is available where the foreign tax authorities involved consents, and the Taxpayer can provide proof that the circumstances brought about in the relevant preceding years match the circumstances during the years covered by the APA. If a rollback is desired, the Taxpayer must provide all information requested within the APA process for the preceding years intended to be covered.

Collateral issues Any administrative or tax issues that are relevant to and may affect the outcome of the APA should be addressed and resolved at the pre-filing stage with the Federal Central Tax Office.


GERMANY (cont’d)


Overview Taxpayers should request from the Tax authority a pre-filing meeting to discuss the procedure, agree on the content of the APA request and documents that are required. The relevant tax authority of the Land (State) and all relevant foreign competent authorities must be involved in this discussion. Practical experience shows that Taxpayers are required to:

■■ explain why an APA is suitable in the Taxpayer’s circumstances;

■■ outline the proposed TP method;

■■ introduce all relevant parties of the proposed APA;

■■ discuss with the Tax authority the documentation required for formal filing;

■■ agree with the Tax authority on a filing date and timetable; and

■■ gage whether any of the relevant foreign tax authorities foresee major roadblocks that could prevent the APA application from reaching successful completion.

The Taxpayer may also discuss the Tax authority’s estimation of the prospects of an agreement with foreign tax authorities being reached in the APA procedure. A joint, non-binding estimate should be made on how long it will take to conclude the APA.


Pre-filing is available on an anonymous basis. Any information provided to the Taxpayer that is non-procedural will not be binding, and no preparatory work will be done by the Tax authority beforehand.


GERMANY (cont’d)



Taxpayers must file the formal APA application with the Tax authority, enclosing four copies of each document required. APA applications must include:■■ the scope of application with regard to

(i) business transactions covered by the APA; and (ii) term of the APA

■■ any foreign jurisdiction(s) party to the APA;■■ TP method, justification of the applied method and

determination of the transfer price;■■ documents as agreed in the pre-filing stage;■■ special requirements for cost sharing agreements; and■■ critical assumptions.

The Tax authority may ask for further supporting documentation during the APA process. Practical experience shows that Taxpayer regularly needs to provide the following information:■■ a description of the shareholding/group structure;■■ a description of organisational and operational group structure;■■ a description of the industry in which the relevant parties operate;■■ presentation of business relationships with related parties;■■ a description and explanation of the functions and risks of the

parties covered by the APA;■■ a description of the value chain and contribution of the parties

covered by the APA;■■ a description of the assets (particularly intangible assets) that

are relevant for the business transaction covered by the APA;■■ a description of market and competition circumstances; and■■ a description of all open tax questions that are related to the

business transaction in Germany and any other jurisdiction(s) which are in the scope of the APA.

The application and position of the applicant will be scrutinised, coordinating closely with local tax auditors and negotiating with the relevant foreign tax authorities. After reaching an agreement, Taxpayers are formally asked for approval. Once approved, a ruling will be granted. Until the APA is concluded with legal effect, the request may be altered at any time. However, substantial alterations will be regarded as an entirely new request.



Language The documentation may be submitted in German or in English; however, if provided in English, translations must be made available upon request.

SME provisions Simplified APA procedures are available on request for applicants that meet the small Taxpayer criteria as set out above. This will be provided so long as no threat is posed to the objective of the APA and the agreement with the relevant foreign tax authorities.


General The Tax authority follows a standard pre-filing, application and monitoring process. APAs require the explicit consent of the Taxpayer, hence a waiver of remedies against it is necessary.


An annual report (‘Compliance Report’) must be submitted to the Tax authority and relevant foreign tax authorities demonstrating that the critical assumptions have been satisfied, and including any deviations or adjustments made. The Compliance Report must be delivered by the earlier of the following:

■■ the same time as delivered to the foreign tax authorities; or

■■ filed with the tax return for the relevant assessment period.

Renewal procedure

An APA may be renewed if there is consent from the relevant foreign tax authorities, the renewal request is duly filed, and it can be proved that the underlying facts in the future will continue to match those on which the existing APA is based. An abbreviated procedure without submission of the documents required in an initial request is possible in such circumstances.

GERMANY (cont’d)


GERMANY (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

Bundeszentralamt für Steuern (‘Federal Central Tax Office’, or ‘Tax authority’)

Relevant provisions

The Information Leaflet for competent authority and arbitration procedures, 13 July 2006, (BStBl I 2006, 461).

Acceptance criteria

The Taxpayer must be eligible under one of Germany’s DTTs, or the EU Arbitration Convention (90/436/EEC) to request a MAP. A formal and timely request to the Federal Central Tax Office, including a description of the facts and a legal assessment is required. Furthermore, according to some older German DTTs, access is limited to cases of actual double taxation. The request has to be submitted by the Taxpayer or an authorised representative. MAP requests are accepted in the case of a Taxpayer initiated foreign bona fide adjustment.


Most of Germany’s DTTs permit a Taxpayer to present their case to the Tax authority within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, particularly in older treaties, and the relevant DTT should be consulted for the applicable time limit. The German Tax Authorities are committed to solve MAP cases under DTTs within an average time of 24 months in line with the BEPS Action 14 minimum standard. For cases under the EU Arbitration Convention, respective timeframes will be considered as well including guidance in the 2009 Revised Code of Conduct. Article 7/1 of the EU Arbitration Convention foresees a two-year period for concluding the MAP-phase. Article 4 of the EU Dispute Resolution Directive also foresees a two-year timeframe for the MAP.




Taxpayers should include the following in a MAP request:

■■ name, address (registered office), tax number, and locally responsible tax office of the party covered by the agreement;

■■ detailed information on the facts and circumstances relevant to the case;

■■ details of the tax period affected by the application;

■■ copies of the tax advice the investigation report or comparable documents which have led to the alleged double taxation and other significant documents;

■■ details of any out-of-court appeals or litigation, and any court judgments affecting the case in Germany or abroad; and

■■ a statement by the Taxpayer that, in its own opinion, German or foreign taxation does not comply with the agreement.




Taxpayers may simultaneously request a MAP and initiate domestic litigation proceedings; however, if through the MAP a solution is reached, the solution can only be implemented if litigation is abandoned.

Final tax assessments (including court decisions) are not binding for the tax authorities in a MAP (Sec 175a Fiscal Code). Acceptance of cases where anti abuse provision (domestic or treaty) have been applied is as yet not explicitly defined. Audit settlements do not hinder the later acceptance of a case for MAP. However, Taxpayers can (voluntarily) waive their right to domestic appeals and MAP. Suspension of tax collection for the time of MAP can be requested separately under domestic procedural law rules.

GERMANY (cont’d)


GERMANY (cont’d)


Arbitration Generally, it is Germany’s policy to include arbitration clauses in its DTTs; however, only a small number of German DTTs actually include an arbitration clause (those countries predominantly being European, North American or OECD member states). Additionally, as Germany is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Directive. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 61 APA application requests in 2015 and nine completed applications. The average completion time was 37 months for bilateral and multilateral APAs. Statistics are published in line with the requirements of the EU Joint transfer Pricing Forum.

MAP Germany had a total of 1,180 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 34 months for transfer pricing cases, and 30 months for other cases. Statistics are published through the Inclusive Framework’s publications.


GERMANY (cont’d)



Albania

Algeria

Andorra

Anguilla

Antigua and Barbuda(IV)

Argentina

Armenia(I)

Australia(I), (IV)

Austria(I), (VII)

Azerbaijan

Bahamas

Bangladesh

Belarus

Belgium

Bermuda(IV)

Bolivia

Bosnia-Herzegovina


Bulgaria

Canada

Cayman Islands

China

Cook Islands(IV)

Costa Rica(IV)

Croatia

Cyprus

Czech Republic

Denmark

Ecuador

Egypt

Estonia

Finland

France(I)

Georgia(IV)

Ghana

Gibraltar

Greece

Grenada(IV)

Guernsey

Hungary

Iceland

India

Indonesia

Iran

Ireland(IV)

Isle of Man

Israel

Italy

Ivory Coast

Jamaica

Japan(I), (IV)

Jersey

Kazakhstan

Kenya

Korea (Republic of)

Kosovo

Kuwait

Kyrgyzstan

Latvia

Liberia

Liechtenstein(I), (IV)

Lithuania

Luxembourg(I), (IV)

Macedonia

Malaysia

Malta

Mauritius

Mexico

Moldova

Monaco

Mongolia

Montenegro

Morocco

Namibia

Netherlands(I)

New Zealand

Norway

Pakistan

Philippines(IV)

Poland

Portugal

Romania

Russia

Saint Kitts(IV)


GERMANY (cont’d)

Saint Lucia(IV)

Saint Vincent and the Grenadines

San Marino

Saudi Arabia

Serbia

Slovakia

Slovenia

Singapore

Spain

Sri Lanka

South Africa

Sweden(VIII)

Switzerland(I)

Syria

Taipei(III), (IV)

Tajikistan

Thailand

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan

Turks and Caicos Islands

Ukraine


United Kingdom(I)

United States(I)

Uruguay

Uzbekistan

Venezuela

Vietnam

Zambia

Zimbabwe

NOTES










HONG KONG

APA PROGRAM

KEY FEATURES

Competent authority

Inland Revenue Department (‘IRD’)

Relevant provisions

On 29 December 2017, the Legislative Council of Hong Kong (‘LegCo’) gazetted the Inland Revenue (Amendment) (No. 6) Bill 2017 (‘Bill’), which codifies the APA programme for the first time. APA provisions are summarised in Division 4 of Part 8AA of the Bill. It is anticipated that the Bill will progress through LegCo’s review in the near future and that the IRD will issue corresponding Departmental Interpretation and Practice Notes (‘DIPN’) to replace the existing DIPN No. 48.

Note the below only reflects the IRD’s current practice pursuant to DIPN No. 48 unless stated otherwise.



Acceptance criteria

If deemed appropriate by the IRD, any resident enterprise or non-resident enterprise with a PE in Hong Kong, chargeable to profits tax and having controlled transactions, may apply for an APA. For each year of the proposed APA, purchase and sales transactions must be greater than HKD 80m (approx. USD 10.2m); service transactions must be greater than HKD 40m (approx. USD 5.1m); and intangible transactions must be greater than HKD 20m (approx. USD 2.5m).The IRD has the discretion to accept or reject an application.

Unilateral APAs will only be considered where:

■■ the foreign tax authorities in a bilateral or multilateral APA process do not wish to participate;

■■ the IRD is unable to reach agreement with the foreign tax authorities; and

■■ a country not signatory to a DTT with Hong Kong is prepared to agree a unilateral APA regarding transactions integrally linked to the controlled transactions covered by the proposed APA.


HONG KONG (cont’d)

KEY FEATURES


The Taxpayer is required to submit an APA proposal and case plan no later than one month before a scheduled pre-filing meeting date; and the pre-filing meeting should commence at least six months prior to the commencement date of the APA.

APA term limits Generally an APA will apply for three to five years.

Filing fee The IRD currently does not charge a filing fee; however, it is expected that in the near future filing fees are to be comprised of (1) IRD personnel’s service charge on an hourly rate basis up to HK 500,000 (approx. USD 64,000); plus (2) reimbursements of fees paid to independent experts and reasonable expenses incurred by the IRD.


The IRD may decide to roll back the APA terms to prior years. Rollback cannot be used to increase tax liability after the expiry of the time limit in making a tax assessment. Rollback cannot be used to reduce the tax liability after the expiry of the time limits of the Taxpayer’s raising of an objection of a tax assessment or seeking relief of double taxation.

Collateral issues Collateral issues such as legal, tax treaty and tax avoidance issues should be disclosed at the pre-filing stage and will be addressed simultaneously with an APA, and may have to be resolved using a separate advance ruling procedure.



Overview The applicant should first request for a pre-filing meeting by writing to the Senior Assessor (Tax Treaty) of the IRD. The pre-filing meeting typically involves:

■■ identification of the nature and scope of the APA process;

■■ identification of the specific matters to be agreed; and

■■ a detailed discussion of the APA process.

The Taxpayer is also required to submit a draft APA case plan and an APA proposal one month before the pre-filing meeting that describes the specific issues for which certainty is sought in relation to the controlled transaction(s) and any collateral issues, together with supporting documentation outlining the scope of the APA and proposed transfer pricing methods.





The formal APA application must be submitted before the agreed deadline and including:

■■ a functional analysis and industry analysis;

■■ details of the proposed TP method;

■■ the terms and conditions governing the application of the TP method including critical assumptions;

■■ data showing that the TP method will produce an arm’s length result; and

■■ information and documentation as agreed in the pre-filing meeting.

Language The documentation should be submitted in English or Chinese. All documents submitted in a language other than those two must be accompanied by an English translation.






General The IRD follows a standard pre-filing, application, and monitoring

process. There are no unique procedural aspects.


The APA should specify the Taxpayer’s obligations in preparing reports at the specified intervals to demonstrate the Taxpayer’s compliance with the APA terms. The Taxpayer has the obligation to notify the IRD of any breach of critical assumptions within a reasonable period of time. The Taxpayer has the obligation to keep records and data used for applying and concluding the APA for seven years. If in the event that the IRD revoke or revise or cancel an APA, the effective date of revocation, revision or cancellation is determined by the IRD.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry. An APA renewal request will go through the same stages as the initial APA request, unless the Taxpayer is eligible for the APA extension.

■■ An APA extension is available where:

■■ the terms of the previous APA have been complied with;

■■ there are no material changes relevant to the controlled transactions or terms of the existing APA;

■■ it is unlikely there will be any material changes over the period of the extended APA;

■■ it is clear the arm’s length benchmarks used remain valid over the period of the extension;

■■ the covered controlled transactions are consistent with the previous APA;

■■ there are no material changes to the functions, assets or risks;

■■ the transfer pricing method used in the previous APA remains the most appropriate; and

■■ the critical assumptions are consistent with the previous APA.


MAP PROGRAM

KEY FEATURES

Competent authority


Relevant provisions

MAP provisions are summarized in Division 3 of Part 8AA of the Bill.

It is anticipated that the Bill will progress through LegCo’s review in the near future. It is anticipated that the IRD will issue corresponding DIPN to replace the relevant rules in DIPN No. 46 and 48.

Note the below only reflects the IRD’s current practice pursuant to DIPN No. 46 and 48 unless stated otherwise.

Acceptance criteria

MAP is available to Hong Kong residents.


MAP should be initiated within the time limit from the first notification of the actions giving rise to taxation not in accordance with the provisions of the DTTs, e.g. the relevant notice of assessment or loss computation issued by the IRD or the equivalent notification from treaty partners. In general, the time limit is specified in the MAP article of the relevant DTT (e.g. three years). Failure to observe the time limit may result in the rejection of your MAP request by the IRD.

MAP should only be initiated when double taxation has occurred or is almost certain to occur.






MAP applications can be made by completing ‘Form IR1454’. The applicant must provide the following information and documents specified in the Form IR1454:

■■ the treaty partner concerned and details of its tax authority;

■■ the Taxpayer’s particulars including name, address, telephone number, business registration number/Hong Kong identity card number and the Taxpayer’s file number in the IRD;

■■ issues for MAP including a summary of the facts, description and analysis of the issues, actions giving rise to the issues with the date of first notification, years or periods concerned and the applicant’s views and proposed basis for resolving the issues;

■■ whether any notice of objection, notice of appeal, refund claim, or comparable document has been submitted by the applicant to either the IRD or the tax authority of the treaty partner;

■■ whether a prior request has been made to the tax authority of Hong Kong or the treaty partner on the same or related issues;

■■ whether the MAP application involves issues that are currently or were previously considered by the IRD or the tax authority of the treaty partner as part of an APA, advance ruling, or similar proceedings;

■■ whether any settlement or agreement has been reached with the IRD or the tax authority of the treaty partner which may affect the MAP application;

■■ details of the Taxpayer’s authorised representative with a copy of the authorisation letter;

■■ a copy of the first notification of action giving rise to the issues for MAP;

■■ a copy of the MAP application and the associated documents filed, or to be filed, with the tax authority of the treaty partner, if applicable;

■■ a schedule of any time limitations under domestic laws of the treaty partner in respect of the years/periods for which relief is sought, if applicable;




■■ a copy of transfer pricing documentation, if applicable;

■■ a statement agreeing that all documents and information submitted may be provided to the competent authority of the treaty partner for processing the MAP application; and

■■ a statement declaring that all documents and information provided in the MAP application are true, complete and accurate.

Language The documentation should be submitted in English or Chinese. All documents submitted in a language other than those two must be accompanied by an English translation.




Arbitration A number of DTTs to which Hong Kong is signatory contain an arbitration provision in the relevant MAP article.

STATISTICS

APA The IRD has had an APA program since 2012. The IRD has signed two bilateral APAs since commencement of the programme.

MAP There are no published statistics on MAP currently available.






Austria

Belarus(IV)

Belgium

Brunei

Canada(I), (IV)

China(IV)

Czech Republic(IV)

France

Guernsey(I), (IV)

Hungary

Indonesia(IV)

Ireland

Italy(I), (IV)

Japan(I)

Jersey(I), (IV)


Kuwait(IV)

Latvia

Liechtenstein(I)

Luxembourg(I)

Malaysia(IV)

Malta(IV)

Mexico(IV)

Netherlands(I)

New Zealand

Pakistan(I), (IV)

Portugal(IV), (VI)

Qatar(IV)

Romania(IV)

Russia(IV)

South Africa(IV)

Spain(IV)

Switzerland(I), (IV)

Thailand

United Arab Emirates(IV)

United Kingdom

Vietnam

NOTES










HUNGARY

APA PROGRAM

KEY FEATURES

Competent authority

Hungarian Tax Authority (National Tax and Customs Administration) (‘HTA’)

Relevant provisions

Section 174-183 of Act CL of 2017 on the Rules of Taxation;

Section 16 of Act CLI of 2017 on the Procedural Regulations of the Tax Administration;

Section 36 of the Act CL of 2016 on the General Procedural Regulations of the Public Administration;

Decree of the Government 465/2017. (XII. 28.) on the Procedural Regulations of the Tax Administration; and

Decree of the Ministry of National Economy 32/2017. (X. 18.) on Transfer pricing registration requirements.



Acceptance criteria

Bilateral and multilateral APAs may only be concluded with jurisdictions signatory to DTTs with Hungary.


The earliest date to be covered under an APA is the date of submission of the APA request. APA requests must be submitted either before the conclusion of the relevant transaction(s) or after the conclusion of transaction(s) that are performed continuously at the time or after the submission of the APA request proposed to be covered under the APA, provided that the relevant transaction(s) are performed for a minimum term of six months; and

– at least one performance takes place every other month; or

– one of the parties maintain specific credit facilities available in favour of the other party during the contract; or

– there is a requirement for the continuous availability of the transaction(s) for either of the parties.


HUNGARY (cont’d)


Key timing requests, deadlines (con’d)

The HTA may request the Taxpayer to provide additional information that is necessary for assessing the APA, or for clarifying new facts, data or circumstances that may emerge in the course of the procedure. The HTA must issue an APA within 120 days after the submission of the request. This period can be extended twice, each time for a further 60 days. The periods of communication with any relevant foreign tax authority and the verification of information with this authority is not included in the above period.

APA term limits The APA is valid for a period of three to five years. Upon request, this period can be extended once for three years.

Filing fee Depending on the number of jurisdiction taking part in the APA, filing fees vary as follows:

Unilateral APAs HUF 2,000,000 (approx. USD 7,350)

Bilateral APAs HUF 4,000,000 (approx. USD 14,700)

Multilateral APAs HUF 2,000,000 (approx. USD 7,350) per participant jurisdiction.


There is no rollback availability.



Overview The Taxpayer may request a pre-filing meeting with the HTA to discuss the conditions under which to conduct proceedings, negotiate a timetable for completion and the documentation necessary for filing the APA request within the framework of a consultation initiated electronically by the Taxpayer prior to the submission of the APA request. The Taxpayer should present a summary of the transaction subject to the APA request, together with the underlying facts and pricing method to be applied. Both the Taxpayer and the HTA may initiate consultation in an APA procedure. The result of the pre-filing consultation and any conclusion reached therein are not legally binding.






The APA request must be submitted electronically to the Central Management of the HTA (NAV Központi Irányítás) and the Taxpayer must be represented by a lawyer, legal advisor, tax advisor, tax expert, or auditor. The APA request may cover a single, or multiple transactions if they can be documented together based on the transfer pricing documentation provisions.

The APA request must contain the following:

■■ identification and contact information of the Taxpayer and its representative;

■■ APA request ‘Form 18 APIAC’ (available on the HTA website);

■■ Master File and Local File in compliance with Decree 32/2017 (X. 18.) of the Minister for the National Economy;

■■ the relevant time period to be covered under the binding force of the APA;

■■ declaration on whether the request is for a unilateral, bilateral or multilateral APA;

■■ accredited translation in English of the APA request and its appendices in case of bilateral or multilateral APA request;

■■ the bank account details into which the filing fee can be refunded in the event that the APA request is refused;

■■ name, seat and identification number of the ultimate parent company of the Taxpayer;

■■ related parties resident in Hungary and data of the related parties concerned with the APA procedure resident in Hungary or in a foreign country (incl. their names, addresses, seats, branches, tax numbers or equivalent identification numbers, and data of the ultimate parent company of the Taxpayer);

■■ declaration on the accuracy of the facts included in the APA request;

HUNGARY (cont’d)


HUNGARY (cont’d)



■■ proof of payment of the filing fee;

■■ signed authorisation for the Taxpayer’s representative;

■■ proxy for the tax advisor, tax expert or lawyer for submission of the APA request and subsequent representation; and

■■ notarised (and apostilled if required) company registry excerpt of the Taxpayer (this must not be older than 30 days).

Language The documentation should be submitted in Hungarian, French, German, or English.

SME provisions APAs are not available to Taxpayers exempt from the obligation to prepare a transfer pricing report.


General The HTA follow a standard electronical pre-filing, application and monitoring process. There are no unique procedural aspects.


There is no monitoring of compliance with APAs, or post-agreement annual filing procedures.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry.


MAP PROGRAM

KEY FEATURES

Competent authority

Hungarian Tax Authority (National Tax and Customs Administration) (‘HTA’)

Relevant provisions

Section 42 of the Act XXXVII of 2013 on detailed regulation of the MAP covering taxes and dues.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Hungary is signatory.


Most of Hungary’s DTTs permit Taxpayers to present a case to the HTA within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. Taxpayers have three years to present a case to the HTA under the EU Arbitration Convention (90/436/EEC).



No specific form is required but the application should include at least the following:

■■ identification of the Taxpayer and any other persons related to the case;

■■ relevant facts of the underlying tax case;

■■ information in relation to any public administrative or civil procedures initiated by the applicant or the other concerned persons regarding the tax case; and

■■ reason for the application.


HUNGARY (cont’d)


HUNGARY (cont’d)




Arbitration As Hungary is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.


STATISTICS

APA There were 24 APA application requests in 2015 and 11 completed applications. The HTA has had an APA program since 2007.

MAP Hungary had a total of 19 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 24 months.


HUNGARY (cont’d)



Albania

Armenia

Australia

Austria

Azerbaijan

Bahrain

Belarus

Belgium

Bosnia-Herzegovina

Brazil

Bulgaria

Canada

China

Croatia

Cyprus

Czech Republic

Denmark(IV)

Egypt

Estonia

Finland

France

Georgia(IV)

Germany

Greece

Hong Kong

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Japan

Kazakhstan

Korea (Republic of)

Kosovo

Kuwait

Latvia

Liechtenstein(IV)

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mexico(IV)

Moldova

Mongolia

Montenegro

Morocco

Netherlands

Norway

Oman

Pakistan

Philippines

Poland

Portugal(IV)

Qatar(IV)

Romania

Russia

San Marino

Saudi Arabia(IV)

Serbia

Singapore

Slovakia

Slovenia

South Africa

Spain

Sweden

Switzerland

Taipei(III)

Thailand

Tunisia

Turkey

Turkmenistan

Ukraine


United Kingdom

United States

Uruguay

Uzbekistan

Vietnam

NOTES










INDIA

APA PROGRAM

KEY FEATURES

Competent authority

Central Board of Direct Taxes (‘CBDT’)

Relevant provisions

Section 92 of the Finance Act 2012;

Circular No. 10 of 2015, dated 10 June 2015; and

FAQs on APAs available on the Income Tax Department website.



Acceptance criteria

Any Taxpayer who has entered into an international transaction or is contemplating to enter into an international transaction is eligible to apply for an APA.


Taxpayers must file the APA application before the first day of the previous year relevant to the first assessment year for which the application is made, in respect of transactions which are of a continuing nature from dealings that are already occurring, or before undertaking the transaction in respect of remaining transactions. Compliance audits of the APA will also be carried out for each of the year covered.


Filing fee The fees payable are based on the amount of the international transaction entered into or proposed to be undertaken:

Under INR 1b (approx. USD 1.5m) INR 1m (approx. USD 15,000)

INR 1b – 2b (approx. USD 1.5m – 3m) INR 1.5m (approx. USD 22,200)

Exceeding INR 2b INR 2m (approx. USD 30,000)


Rollback is available to Taxpayers that have applied for an APA for a period of four consecutive previous years.



INDIA (cont’d)


Overview Pre-filing meetings with the CBDT is optional. To request a pre-filing meeting the Taxpayer must submit three copies of ‘Form No. 3 CEC’ (available on the Income Tax Department’s website) and include the following details:

■■ name, account number, address, location of business and contact number of the Taxpayer;

■■ details of the Taxpayer’s representative (if applicable);

■■ organisation structure of the Taxpayer’s group and industry in which it operates;

■■ names of all associated entities relevant to the transaction to be covered;

■■ name of the jurisdiction(s) in which the associated entity is located;

■■ business model and operations in the prior three years;

■■ functional and risk profile of the applicant and associated entities;

■■ details of the transaction(s) proposed to be covered;

■■ value of such international transactions covered under transfer pricing audits in the previous three years;

■■ details of all other international transactions not proposed to be covered in the APA;

■■ type of APA proposed;

■■ number of years the APA will cover;

■■ proposed TP method to be used with supporting documentation;

■■ identification of third-party comparables;

■■ details of arm’s length price or profit level indicator;



INDIA (cont’d)


Overview (cont’d) ■■ details of any issues, requests or settlements with the Central Board of Direct Taxes; and

■■ history of transfer pricing audits, assessments and present status of appeals;

■■ The meeting shall, among other things:

■■ determine the scope of the agreement;

■■ identify transfer pricing issues;

■■ determine the suitability of international transaction for the agreement; and

■■ discuss broad terms of the agreement.

The pre-filing consultation shall not bind the Board or the person to enter into an agreement or initiate the agreement process, and shall not be deemed to mean that the person has applied for entering into an agreement.






The Taxpayer must submit an APA application with Form No. 3 CED along with the requisite filing fee. The application must include:

■■ name, account number, address, location of business and contact number of the Taxpayer;

■■ details of the Taxpayer’s representative (if applicable);

■■ whether pre-filing discussions were sought and the details of the same;

■■ name(s) of the associated entities with whom the APA is requested;

■■ jurisdiction(s) in which the associated entities are located;


■■ evidence of payment of the filing fee;

■■ period of APA proposed;

■■ details of the international transactions proposed to be covered in the APA;

■■ proposed TP method;

■■ proposed terms and conditions;


■■ history and background of the Taxpayer and associated entities;

■■ general description of business and products/services;

■■ organisational structure;

■■ identification of all other transaction flows of the multinational enterprise that may have an impact on the pricing of the covered transactions;

■■ functional currency for each entity and currency used for the transactions to be covered;

INDIA (cont’d)


INDIA (cont’d)



■■ accounting and costing system, policies, procedures, and practices, including any significant financial and tax accounting differences that may affect the transfer pricing method(s);

■■ functional analysis of the Taxpayer and all relevant entities;

■■ financial and operating information including corporate annual reports, and agreements;

■■ industry and market analyses;

■■ transfer pricing background;

■■ transfer pricing method analysis; and

■■ impact of proposed transfer pricing method.




General The CBDT follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


Taxpayers must furnish four copies of an annual compliance report to the Director General of Income Tax (International Taxation) for each year covered in the agreement. The report must be received the later of either 30 days prior to the due date of filing the income tax return for that year, or within 90 days of entering into an agreement.

Renewal procedure

An APA renewal application will go through the same stages as the initial APA application.


INDIA (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

Central Board of Direct Taxes (‘CBDT’)

Relevant provisions

Rules 44G and 44H of guidance issued by the Indian government on 6 February 2003.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which India is signatory.


Most of India’s DTTs permit Taxpayers to present a case to the CBDT within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.



Taxpayers must file a MAP request by submitting ‘Form 34F’, which must include the following:

■■ name of the relevant foreign country to which the request relates;

■■ relevant DTT and article that in the Taxpayer’s opinion has been contravened;

■■ name, account number, office address and telephone number, and status of the Taxpayer;

■■ name of the tax authority in the relevant foreign country;

■■ date of the notice or order giving rise to the request;

■■ statement articulating how the notice or order is not in accordance with the relevant DTT;

■■ a copy of the notice or order giving rise to the request;

■■ any other relevant documentation; and

■■ the tax assessment year(s) to which the request relates.



INDIA (cont’d)



Taxpayers may pursue domestic administrative or judicial proceedings separately from MAP.


STATISTICS

APA There were 99 active APA applications during income year 2016-2017 and 88 completed applications (as of 31 March 2017). The average completion time was 29 months. The Central Board of Direct Taxes has had an APA program since 2012. There have been a total of 220 APAs signed as of 3 May 2018, out of which 200 were unilateral and 20 were bilateral APAs.

A total of 815 APA applications were made in the five years starting from 2012 until 31 March 2017. Out of the 815 APA applications, 109 are bilateral ones.

MAP India had a total of 645 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 27 months for transfer pricing cases, and 108 months for other cases.


INDIA (cont’d)



Albania(IV)

ArmeniaAustraliaAustriaBangladeshBelarusBelgiumBhutan(IV)

BotswanaBrazilBulgariaCanadaChinaColombia(IV)

Croatia(IV)

Cyprus(IV)

Czech RepublicDenmarkEgypt

Estonia(IV)

Ethiopia(IV)

Fiji(IV)

FinlandFranceGeorgia(IV)

GermanyGreeceHungaryIcelandIndonesia(IV)

IrelandIsraelItalyJapan(IV)

JordanKazakhstanKenyaKorea (Republic of)(IV)

KuwaitKyrgyzstanLatvia(IV)

LibyaLithuania(IV)

LuxembourgMacedonia(IV)

Malaysia(IV)

Malta(IV)

MauritiusMexicoMongoliaMontenegroMoroccoMozambiqueMyanmarNamibiaNepal(IV)

Netherlands

New ZealandNorway(IV)

OmanPhilippinesPolandPortugalQatarRomania(IV)

RussiaSaudi ArabiaSerbiaSingaporeSlovak Republic(IV)

SloveniaSouth AfricaSpainSri Lanka(IV)

SudanSweden

SwitzerlandSyriaTajikistanTanzania(IV)

Thailand(IV)

Trinidad & TobagoTurkeyTurkmenistanUgandaUkraineUnited Arab EmiratesUnited KingdomUnited States Uruguay(IV)

UzbekistanVietnamZambia

NOTES










INDONESIA

APA PROGRAM

KEY FEATURES

Competent authority

The Director General of Taxation

Relevant provisions

Article 18(3a) of the Income Tax Law;

Government Regulation 74 of 2011;

Ministry of Finance Regulation 7 of 2015; and

Director General of Taxation Regulation PER-69 of 2010.



Acceptance criteria

The applicant must have been operating in Indonesia for at least a three-year period prior to applying for the APA.


Requests for a preliminary meeting must be submitted at least six months prior to the start of the tax year that is intended to be covered by the APA; and the formal request for an APA and its supporting documentation must be received by the Director General of Taxation by the end of the financial year preceding the start of the year that would be covered by the proposed APA.

APA term limits There is a three-year maximum term for unilateral APAs and four-year maximum term for bilateral and multilateral APAs.



A unilateral APA will be effective since the year of the APA signed; and bilateral and multilateral APAs will be effective based on mutual agreement with the Director General of Taxation.



Collateral issues The Director General of Taxation may re-evaluate or terminate APA if any of the following apply:

■■ the Taxpayer does not comply with the APA;

■■ the Taxpayer conveyed wrong data or information;

■■ the Taxpayer does not submit annual compliance report;

■■ the Taxpayer does not prepare annual compliance report in accordance with the prevailing regulation;

■■ there are changes in the factors affecting the critical assumptions;

■■ the Taxpayer fails to submit the notification should there are factors affecting the critical assumptions;

■■ the Taxpayer submits an application to re-evaluate or terminate the APA;

■■ it is found that there are mistakes in the APA; and

■■ there are indications that the Taxpayer engaged or is engaging in tax fraud.


Overview Taxpayers must request a pre-filing meeting with the Director General of Taxation to discuss:

■■ the factors that make it a necessity to implement the APA;

■■ the scope of APA proposed by the Taxpayer;

■■ the proposed TP method;

■■ any other existing APAs involving foreign CA(s);

■■ the Taxpayer’s documentation and analysis;

■■ a time frame for the formation of the APA; and

■■ any other matters relating to the formation and implementation of the APA.

INDONESIA (cont’d)




Overview (cont’d) Upon request of the pre-filing meeting the Taxpayer must disclose:

■■ a description of the Taxpayer’s reasons applying for APA;

■■ a full overview of the Taxpayer’s business plan and its business activities;

■■ the Taxpayer’s corporate structure, including group, ownership and organisational structures;

■■ the shareholders of the Taxpayer and the nature of their related-party transactions;

■■ other related parties and the nature of their related-party transactions;

■■ the transactions covered under the proposed APA;

■■ the TP method and relevant documentation;

■■ changes of the business conditions that may materially affect the appropriateness of Taxpayer’s TP method;

■■ accounting system, production process and decision making process;

■■ a list of competitors including information in relation to the competitors’ characteristics and market share;

■■ a copy of the Taxpayer’s articles of association; and

■■ a copy of the Taxpayer’s corporate income tax return and financial statements for the last three years.






A formal APA request form (‘Form APA-2 ‘) must be addressed to the DGT and consist of:

■■ name of Taxpayer, tax identification number, and address;

■■ identity of related parties; and

■■ the scope of transaction and fiscal year covered by proposed APA.

This should be accompanied by:

■■ a detailed summary of the preliminary meeting;

■■ the TP method proposed by the Taxpayer and documentation that supporting the selection of this method;

■■ the conditions that are used as the basis for determination of the TP method;

■■ explanation and documentation that the proposed TP method is consistent with the arm’s length principle; and

■■ critical assumptions, taking into account:

– amendments to tax laws and regulations;

– changes in tariff and import duties;

– amendment to industry regulations;

– force majeure events;

– new competitors who have significant impact on market price structure;

– new government regulations that have significant impact on the Taxpayer’s business activities;

– economic conditions that have significant impact on sales volume, production units or market share;

– changes of Taxpayer’s business activities such as company restructuring; and

– significant changes in relevant foreign exchanges rates.

Language The documentation must be submitted in Indonesian.






General While the Director General of Taxation generally follows a standard pre-filing, application and monitoring process, the key timing requests and deadlines, as well as the level of participation in negotiations the Taxpayer is expected to have after formally submitting the APA request should be noted.


Taxpayers must submit an ‘Annual Compliance Report’ to the head of the applicable local tax service office within four months after the end of the tax year. The Annual Compliance Report must contain:

■■ detailed information in relation to the Taxpayer’s compliance in applying the TP method to the transaction(s) covered in the APA;

■■ an explanation of the accuracy and consistency on the implementation of the TP method; and

■■ an explanation of the accuracy of the critical assumptions used in the implementation of the TP method.

Renewal procedure

The renewal procedures are the same as for the initial APA. Application for renewal can be made in the last tax year of the APA’s validity period.



MAP PROGRAM

KEY FEATURES

Competent authority

The Director General of Taxation

Relevant provisions

Ministry of Finance Regulation PMK 240 of 22 December 2014; and Director General of Taxation Regulation PER-48

Acceptance criteria

A MAP request must be within the scope of a DTT of which Indonesia is signatory, and can only cover the following:

■■ transfer pricing issues;

■■ PE issues;

■■ dual residence issues; or

■■ income from a DTT partner country and withholding tax issues.


Most of Indonesia’s DTTs permit Taxpayers to present a case to the Director General of Taxation within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.





Taxpayer’s filing a MAP request are required to submit the following:

■■ name, tax identification number, address, and type of business of Indonesian tax resident who applies the request;

■■ name, tax identification number, address and type of business of taxpayer who is domiciled in the DTT partner country and as related party to the applicant Taxpayer;

■■ name, tax identification number, address and type of business of taxpayer who is domiciled in the DTT partner country that withholds tax from on income received or earned of Indonesian tax resident who requests the MAP;

■■ actions that have been conducted by the tax resident of the treaty partner or tax authorities of the treaty partner, which are deemed not in line with DTT rules;

■■ explanation of whether or not the Indonesian taxpayer applies a revision request, objection or appeal to the domestic tax court;

■■ the tax year(s) to which request relates;

■■ information in relation to the transaction(s) subject of the request, that have been corrected by the tax authorities of the relevant foreign country, including the substance of the transaction, the amount of the correction, and the key arguments made underpinning the correction;

■■ the Taxpayer’s opinions in relation to the correction that has been conducted by the tax authorities of relevant foreign country;

■■ contact details of the relevant official(s) from the relevant foreign country for MAP negotiations; and

■■ the provision(s) of the DTT that have not been correctly applied in the opinion of the Taxpayer.

Language The documentation must be submitted in Indonesian.




Taxpayers may pursue Indonesian domestic legal proceedings separately from MAP; however, Indonesian legal proceedings may be suspended until the MAP has been finalised.


STATISTICS

APA Statistics on APAs and MAP are not publicly available.

MAP Indonesia had a total of 49 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 40 months for transfer pricing cases, and 28 months for other cases.






Algeria

Armenia(IV)

Australia

Austria

Bangladesh

Belgium

Bermuda

Brunei

Bulgaria

Canada

China

Croatia

Czech Republic

Denmark

Egypt

Finland

France

Germany

Hong Kong(IV)

Hungary

India(IV)

Iran

Italy

Japan

Jersey

Jordan

Korea (Republic of)

Kuwait

Laos(IV)

Luxembourg

Malaysia

Mexico(I)

Mongolia

Morocco(IV)

Netherlands

New Zealand

Norway

Pakistan

Papua New Guinea(IV)

Philippines

Poland

Portugal

Qatar

Romania

Russia

Saudi Arabia

Seychelles

Singapore

Slovak Republic

South Africa

Spain

Sri Lanka

Sudan

Suriname(IV)

Sweden

Switzerland

Syria

Thailand

Tunisia

Turkey

Ukraine


United Kingdom

United States

Uzbekistan

Venezuela

Vietnam

Zimbabwe

NOTES










IRELAND

APA PROGRAM

KEY FEATURES

Competent authority

Transfer Pricing Branch of the Revenue (‘Revenue’)

Relevant provisions

Bilateral Advance Pricing Agreement Guidelines 2016, available on the Revenue’s website.


Bilateral and multilateral APAs are available.

Acceptance criteria

Taxpayers in Ireland and PEs in Ireland of non-resident Taxpayers located in jurisdictions with which Ireland has an effective DTT are eligible to apply for an APA. APAs may be sought for transfer pricing issues, including the attribution of profits to a PE.

Factors which are more likely to result in a request for an APA being accepted include:

■■ significant doubt over the TP method;

■■ a high likelihood of double taxation arising if no APA is in place;

■■ the Taxpayer is applying a bespoke TP method;

■■ the application of the TP method is complex and/or requires complex calculations;

■■ reliable comparables are not readily available and/or significant and complex adjustments are required; and

■■ the transactions which are to be covered by the APA have already been entered into or are about to be entered into and are not expected to change throughout the APA period.

If a Taxpayer is involved in a case with the Tax Appeals Commission or in court proceedings in respect of a matter which is related to the transactions covered by the proposed APA, the APA application may be rejected. Any such involvement should be disclosed at the pre-filing meeting.


Taxpayers must submit an APA application before the beginning of the first accounting period to be covered by the APA.


IRELAND (cont’d)


APA term limits There is a five-year maximum term for an APA (excluding rollback years).



Rollbacks are available subject to the applicable time limits of the jurisdictions involved in the APA; the relevant facts and circumstances; and whether there are any ongoing audits, examinations, appeals or judicial proceedings in respect of the periods or transactions which are to be covered by the rollback.

Collateral issues No specific guidance; however, the issue of whether there is PE or no PE must be dealt with prior to filing a formal application.


Overview The Taxpayer is encouraged to contact the Revenue to discuss the APA application in a pre-filing meeting on an informal basis. The meeting will include a discussion of the following:

■■ a high-level overview of the business and corporate structure of the Taxpayer and MNE;

■■ the parties to the APA and the jurisdictions involved;

■■ the nature of the transactions to be covered under the APA, years to be covered and the amounts involved;

■■ the proposed TP method (if decided upon);

■■ a high-level overview of any transfer pricing audits related to the transaction subject of the APA discussions; and

■■ any other information which the Taxpayer considers important and relevant to the APA application.


Anonymous pre-filing is available; however, the Revenue strongly recommends pre-filing meetings are conducted on a named basis.




Taxpayers must submit three hard copies of the APA application to the Director of the Transfer Pricing Branch of the Revenue. The application must include:

■■ an executive summary;

■■ details on the company background;

■■ an industry analysis;

■■ an economic analysis (covering the proposed TP method, search for comparables and any adjustments); and

■■ details of any related audits.

The Revenue will consult with the foreign tax authorities involved prior to acceptance into the program. Once satisfied that the transaction is suitable for an APA, the Revenue will issue an acceptance letter to the Taxpayer. Original documents should not be submitted to the Revenue, as all documentation will be retained. The Revenue may request a site visit and interviews with appropriate personnel from the Taxpayer’s organisation during the processing of the application.

Language The documentation should be submitted in Irish or English.

IRELAND (cont’d)


IRELAND (cont’d)


General The Revenue follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


Taxpayers must file an ‘Annual Report’ by the due date for filing of their annual corporate income tax return. The Annual Report must include the following:

■■ a statement of compliance with the APA, including critical assumptions;

■■ a statement of whether critical assumptions remain valid throughout the period of the APA;

■■ financial data for the period comparing the actual results for the covered transaction with the targeted arm’s length result agreed in the APA;

■■ details of any compensating adjustments made to stay within the targeted arm’s length range agreed in the APA;

■■ details of any pending requests to modify, renew or cancel the APA; and

■■ identification and correction of any incorrect or incomplete information which has been submitted to the Revenue which comes to the Taxpayer’s attention prior to submission of the Annual Report which may have a material impact on the APA.

Additional information may be requested, and the Taxpayer must notify the Revenue if the foreign CA(s) request additional information.

Renewal procedure

The Taxpayer is encouraged to make early contact with the Revenue to request the renewal of an APA. The Taxpayer may be required to outline any changes to the material facts and circumstances and critical assumptions from the original APA, and address the continued appropriateness of the TP method employed. Where transfer pricing issues differ significantly from the original APA, the Revenue may require the Taxpayer to submit an application for a new APA.


IRELAND (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

The International Tax Division of the Revenue (‘Revenue’)

Relevant provisions

Guidance ‘International Tax: Mutual Agreement Procedures’ available on the Revenue’s website.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Ireland is signatory.


Most of Ireland’s DTTs permit Taxpayers to present a case to the Revenue within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. Taxpayers have three years to present a case to the Revenue under the EU Arbitration Convention (90/436/EEC).



In order for a MAP request to be considered a valid request under the relevant DTT, it must include the following, at a minimum:

■■ the tax period(s) concerned;

■■ the nature of the action giving rise, or expected to give rise, or expected to give rise, to taxation not in accordance with the relevant DTT; and

■■ the full names and addresses of the parties to which the MAP relates.

In order for a MAP request to be considered a valid request under article 6(1) of the EU Arbitration Convention, it must include the following at a minimum:

■■ the identification of the Taxpayer to which the MAP relates and the other parties to the relevant transactions;

■■ the tax period(s) concerned;


IRELAND (cont’d)



■■ details of the relevant facts and circumstances of the case;

■■ copies of any tax assessment notices, tax audit reports or equivalent documents leading to the alleged double taxation;

■■ details of any appeals and litigations initiated by the Taxpayer or other parties to the relevant transactions; and

■■ an explanation by the Taxpayer of why it considers that the principles of the EU Arbitration Convention have not been observed.

The information that must be included with a request for a MAP presented under either a DTT or the EU Arbitration Convention is set out below:

■■ identity (such as name, address, tax identification number or birth date, contact details) of the Taxpayer(s) covered in the MAP request and of the other parties to the relevant transaction(s);

■■ details of the relationship between the Taxpayer and the other parties to the relevant transaction(s);

■■ the legal basis for the request i.e. the specific DTT and/or the EU Arbitration Convention including the provision(s) of the specific article(s) which the Taxpayer considers is not being correctly applied by either one or both countries (and to indicate which country and the contact details of the relevant person(s) in that country);

■■ facts and circumstances of the case (including any documentation to support these facts such as financial statements and intercompany legal agreements, the taxation year(s) or period(s) involved and the amounts involved, in both the local currency and foreign currency);




■■ an analysis of the issues involved (supported with relevant documentation, for example, tax assessment notices, tax audit report or equivalent leading to the alleged double taxation, evidence of tax paid (where applicable)), including:

– the Taxpayer’s interpretation of the application of the specific DTT provision(s), to support the basis for making a claim that the provision of the specific DTT is not correctly applied by either one or both countries; and/or

– an explanation by the enterprise why it considers that the principles set out in Article 4 of the EU Arbitration Convention have not been observed.

■■ the request should state whether the issue(s) presented in the MAP request have been previously dealt with, for example, in an advance ruling, APA, settlement agreement or by any tax tribunal or court. This includes details of any appeals and litigation procedures initiated by the Taxpayer or the other parties to the relevant transactions. If yes, a copy of these rulings, agreements or any court decisions concerning the case should be provided;

■■ any other information or documentation requested by the Revenue. Responses to requests for additional information should be complete and submitted within the time stipulated in the request for such information or documentation;

■■ an undertaking that the enterprise shall respond as completely and quickly as possible, providing wholly accurate and complete information, to all reasonable and appropriate requests made; and

■■ confirmation of whether the MAP request was also submitted to the tax authority of the relevant foreign country – if so, the MAP request should make this clear, together with the date of such submission, the name and the designation of the person or the office to which the MAP request was submitted. A copy of that submission (including all documentation filed with that submission) should also be provided unless the content of both MAP submissions are the same.

IRELAND (cont’d)




For MAP requests relating to transfer pricing and the attribution of profits to a PE, the information should be sent to the Director of the Transfer Pricing Branch. For non-transfer pricing MAP requests, the information should be sent to the Director of the Tax Treaties Branch. The Taxpayer must undertake to respond as completely and quickly as possible to requests by the Revenue for further information.

Language The documentation should be submitted in Irish or English.



Taxpayers may pursue Irish domestic legal proceedings separately from MAP, and while judicial or administrative proceedings are ongoing. In such cases, the Revenue will generally request that the Taxpayer agrees to the suspension of its judicial or administrativeremedies pending the outcome of the MAP. If the Taxpayer does not agree to suspend the administrative or judicial remedies, the Revenue will delay the MAP process pending the outcome of the administrative or judicial proceedings. Taxpayers may also request MAP assistance from the Revenue where a decision has been rendered by an Irish court or the Appeal Commissioners; however, the Revenue cannot derogate in the MAP negotiations from a decision of the Appeal Commissioners or the highest court in which the matter is heard.

Arbitration As Ireland is a member of the European Union, taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

IRELAND (cont’d)


STATISTICS

APA There were four APA application requests in 2015 and two completed applications. The average completion time was 33 months for bilateral and multilateral APAs. The Revenue has had an APA program since 2016; however, APA applications were processed by the Revenue prior the establishment of the formal program.

MAP Ireland had a total of 45 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 87 months for transfer pricing cases, and 11 months for other cases.

IRELAND (cont’d)


IRELAND (cont’d)



Albania

Armenia

Australia

Austria

Bahrain

Belarus

Belgium

Bosnia-Herzegovina

Botswana(IV)

Bulgaria

Canada(I)

Chile

China

Croatia

Cyprus

Czech Republic

Denmark

Egypt

Estonia(IV)

Finland

France

Georgia

Germany(IV)

Greece

Hong Kong

Hungary

Iceland

India

Israel(I)

Italy

Japan

Kazakhstan(IV)

Korea (Republic of)

Kuwait

Latvia

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mexico(I)

Moldova

Montenegro

Morocco

Netherlands

New Zealand

Norway

Pakistan(IV)

Panama

Poland

Portugal

Qatar

Romania

Russia

Saudi Arabia

Serbia

Singapore

Slovak Republic

Slovenia

South Africa

Spain

Sweden

Switzerland

Thailand(IV)

Turkey


Ukraine(IV)

United Kingdom

United States(I)

Uzbekistan

Vietnam

Zambia(IV)

NOTES










ISRAEL

APA PROGRAM

KEY FEATURES

Competent authority

Transfer Pricing Department (‘TPD’) of the Israeli Tax Authority

Relevant provisions

Sections 85A (d) and 158 of the Income Tax Ordinance



Acceptance criteria

Applications may be made by any Taxpayer seeking an APA to cover international transactions.


The TPD has a 120-day timeframe within which it must approve or reject an APA application; however, a 60-day extension may be granted where notice is given to the Taxpayer. The clock begins to run only after all documents requested have been provided.

APA term limits There is no specific guidance for APA term limits. In practice, the APA term will range between three to four years.










ISRAEL (cont’d)



While there is no specific guidance on the content of an APA application, an initial APA request should be sent to the TPD and include:

■■ the essential facts;

■■ transfer pricing documentation;

■■ relevant documents, approvals, opinions, declarations, estimates and agreements;

■■ a description of the intercompany transaction; and

■■ the Taxpayer’s proposed consideration for the transaction, including the profit level margin.

The TPD will then respond to the Taxpayer with a request for the following data:

■■ information regarding comparable transactions;

■■ the chosen TP method;

■■ comparability factors and details regarding any adjustments made to the comparability factors;

■■ the reasons for choosing the selected TP method;

■■ the results of the comparables;

■■ the relevant range of values or the interquartile range and any conclusions drawn from the comparison;

■■ financial reports of both parties for the previous three years; and

■■ any document or other detail that deems necessary for the ITA decision.

The TPD will then negotiate with the Taxpayer and may request more documents, meetings and site visits.

Language There is no specific guidance on the language in which documentation must be submitted. In practice, the application is expected to be submitted in Hebrew while the documentation may be submitted in English.




General The Tax authority has a 120-day timeframe within which it must approve or reject an APA application; however, a 60-day extension may be granted where notice is given to the Taxpayer. The clock begins to run only after all documents requested have been provided. If the TPD do not issue their decision within the time limits provided, approval of the APA will be considered to have been given and the transaction subject of the APA will be deemed to be at arm’s length.


Taxpayers should indicate in their annual tax return (‘Form 1385’) whether it engages in an international transaction, that is covered under an APA.

Renewal procedure

There is no specific guidance for a renewal procedure. In practice, the ITA supports APA renewals; however, the procedure is similar to the initial APA as stated above.

ISRAEL (cont’d)


ISRAEL (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

International Tax Department of the Israeli Tax Authority (‘Tax authority’)

Relevant provisions

MAP provisions have not been incorporated into domestic Israeli law.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Israel is signatory.


Most of Israel’s DTTs permit Taxpayers to present a case to the Israeli Tax authority within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.



Taxpayers must submit a MAP request that includes the following:

■■ a description of the relationship (subsidiary, ownership, etc.) between the Taxpayer and the relevant entity;

■■ names and addresses of the entities;

■■ the applicable DTT and the relevant provisions;

■■ a description of the transaction with regard to which the assistance is requested, as well as proof of the harm (double taxation) that has occurred or might occur in the future;

■■ an explanation of the requested relief;

■■ amounts related to the requests (in new Israeli shekels and the relevant currency);

■■ the assessment of the local tax office, if one is available;

■■ a statement regarding whether the statute of limitations has expired for objecting to the assessment in the other country;

■■ whether any other taxing authorities are involved (e.g. customs);




■■ any legal procedures that are completed or underway in the relevant foreign country which are related to the transaction;

■■ a declaration by the Taxpayer that it relinquishes its right to confidentiality;

■■ a declaration addressed to the relevant foreign tax authority which permits the Tax authority to reveal information regarding the Taxpayer; and

■■ an acknowledgement of the Taxpayer’s obligation to update the Tax authority in the event of changes or developments.




Domestic courts have signalled that the MAP negotiation should occur before the commencement of domestic legal proceedings.


STATISTICS

APA Statistics on APAs are not publicly available.

MAP Israel had a total of 19 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 39 months for transfer pricing cases, and 58 months for other cases.

ISRAEL (cont’d)


ISRAEL (cont’d)



Austria

Azerbaijan(IV)

Belarus

Belgium

Brazil

Bulgaria

Canada(IV)

China

Croatia

Czech Republic

Denmark(I)

El Salvador

Ethiopia

Finland

France

Germany(IV)

Georgia

Greece

Hungary

India

Ireland(I)

Italy

Jamaica

Japan

Korea (Republic of)

Mexico

Netherlands

Norway

Philippines

Poland

Portugal

Romania

Russia

Singapore

Slovak Republic

South Africa

Spain

Sweden

Switzerland

Thailand

Turkey

Ukraine

United Kingdom

United States

Uzbekistan

NOTES










ITALY

APA PROGRAM

KEY FEATURES

Competent authority

Central Directorate of Assessment of the Italian Revenue Agency (‘the Agency’)

Relevant provisions

Article 31-ter ph. 1, of the Presidential Decree No. 600 of 29 September 1973; and

Statement of Practice No. 2016/42295, issued by the Italian Revenue Agency.



Acceptance criteria

Taxpayers are eligible to apply for an APA if they:

■■ are resident companies that are owned by, or are subject to common control by a non-resident company;

■■ hold stakes in the assets, funds or capital of non-resident Taxpayers, or have stakes in the assets, funds or capital held by non-resident Taxpayers; and

■■ operate in Italy through a PE, or residents of Italy that operate abroad through a PE.


APA applications must be submitted before submission of a tax return. The Agency will either accept or reject the application within 30 days from its notification. The entire procedure shall be concluded within 180 days from the notification of the APA. Please note, however, that according to the Agency, this time limit is non-mandatory.

APA term limits There is a five-year term for an APA, including the year when the APA is concluded and the following four.



ITALY (cont’d)



A limited rollback is available up to the year when the APA was filed if:

■■ the APA is the result of a MAP (for bilateral or multilateral APAs); or

■■ the facts and circumstances underlying the APA are equally met in the previous years (unilateral APAs)

Collateral issues Taxpayers subject to an ongoing tax audit cannot apply for an APA.


Overview Taxpayers may request a pre-filing meeting with the Agency. A formal APA application can then be submitted.





The APA application must include:

■■ the Taxpayer name and address of its registered office;

■■ the applicable tax code and/or VAT;

■■ the name and contact details of other related entities;

■■ an outline of the transactions covered under the APA;

■■ documentation that is evidence of the international transaction to be covered under the proposed APA;

■■ summary description of operations and related goods and services; and

■■ the proposed TP method and reasons why this is the most appropriate in the circumstances.

The APA application may also include documentation that is evidence of the international transaction to be covered under the proposed APA. If successful, the Agency will send a copy of the agreement to the foreign EU tax authorities where the counterparties are resident for tax purposes.





General The Agency follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


Taxpayers must prepare and make available documents and information at the request of the Agency. The Agency may also request access to the Taxpayer’s premises.

Renewal procedure

Applications for the renewal of APAs are required to be lodged at least 90 days before expiry.

ITALY (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Central Directorate of Assessment of the Italian Revenue Agency (‘the Agency’)

Relevant provisions

There are no specific provisions for the MAP procedure in domestic law. Taxpayers must rely on the MAP provisions under DTTs or under the EU Arbitration Convention (90/436/EEC).

Acceptance criteria

A MAP may be commenced for any situation which falls under the provisions of an applicable DTT concluded by Italy, or under the EU Arbitration Convention.


Taxpayers must submit a MAP request within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, under DTTs time limits may vary, and the relevant provisions should be consulted for the applicable time limit. Taxpayers have three years to present a case to the Tax authority under the EU Arbitration Convention.

ITALY (cont’d)




Taxpayers should submit the following information:

name, address and tax identification number;

■■ the tax domicile of the taxpayer or of any legitimate recipient to which the tax administration can address any communication regarding the state of the MAP;

■■ an illustration of the facts and circumstances of the case, with a specific reference to the tax years in which double taxation occurred or might occur;

■■ a description of any administrative or legal proceeding undertaken in Italy, such as a request for a tax settlement or the submission of a legal appeal;

■■ a description of the remedies, if any, activated in the other Contracting State to eliminate the double taxation;

■■ a copy of the tax documents which resulted, or that might result, in taxation not in accordance with the provisions of the DTT (in particular, a copy of the notice denying the refund or, in case of an implied denial, a copy of the refund claim submitted pursuant to Article 37, second paragraph, and 38 of the Presidential Decree No. 602 of 1973); and

■■ any other form of documentation instrumental to ease the scrutiny by the competent authorities involved in the MAP.


ITALY (cont’d)




Under Italian Constitutional law, a court decision takes precedence over an agreement between competent authorities. Most of the DTTs concluded by Italy provide that the MAP is not an alternative to the domestic proceedings which shall be, in any case, pre-emptively initiated. In order to prevent conflicts between a tax court decision and the agreement between the tax authorities, the proceedings may be suspended during the MAP negotiations. If the MAP is activated under the EU Arbitration Convention, the initiation of the domestic proceedings is not mandatory.

Arbitration As Italy is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.

The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body. The availability of Arbitration clauses under the DTTs concluded by Italy may vary and the relevant provisions should be consulted.

STATISTICS

APA There were 143 APA application requests in 2015 and 27 completed applications. The average completion time was 40 months for bilateral and multilateral APAs. The Italian Revenue Agency has had an APA program since 2003.

MAP Italy had a total of 438 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 15 months for transfer pricing cases, and 39 months for other cases.

ITALY (cont’d)




AlbaniaAlgeriaArgentinaArmeniaAustralia AustriaAzerbaijan(IV)

BangladeshBarbados(IV)

BelarusBelgiumBosnia-Herzegovina BrazilBulgariaCanada(I)

Chile(IV)

ChinaCongo(IV)

Croatia Cyprus

Czech RepublicDenmarkEcuadorEgyptEstoniaEthiopiaFinlandFranceGeorgia(I)

GermanyGhanaGreeceHungaryHong Kong(I), (IV)

Hong Kong(IV)

HungaryIceland IndiaIndonesiaIreland

IsraelIvory CoastJapanJordanKazakhstanKorea (Republic of)KuwaitLatvia LebanonLithuaniaLuxembourgMacedoniaMalaysiaMalta MauritiusMexico(IV)

MoroccoMoldova MozambiqueNetherlands

New ZealandNorwayOmanPakistanPhilippinesPoland PortugalQatarRomania(IV)

RussiaSan Marino(IV)

Saudi Arabia SenegalSerbia and MontenegroSlovak RepublicSloveniaSouth AfricaSpainSan Marino(IV)

Singapore

Sri LankaSwedenSwitzerlandSyriaTaipei(III)

TanzaniaThailandTrinidad and TobagoTunisiaTurkeyUgandaUkraine(IV)

United Arab EmiratesUnited KingdomUnited States(I) UzbekistanVenezuelaVietnamZambia

ITALY (cont’d)

NOTES










JAPAN

APA PROGRAM

KEY FEATURES

Competent authority

National Tax Agency (‘NTA’) and relevant regional tax bureau (‘Competent tax authorities’)

Relevant provisions

Chapter 6 of the Commissioner’s Directive on the Operation of Transfer Pricing (Administrative Guidelines) 2001 (amended on 16 February 2018), issued by the NTA.



Acceptance criteria



APA applications must be submitted by the first day of the first fiscal year to be covered. If a bilateral or multilateral with a request for rollback is filed before a TP examination commences, the competent tax authorities will not commence an examination of the rollback years. However, if an examination has already commenced, the examination cannot be stopped by filing an APA application.




Rollback of the APA terms is available for bilateral APAs for up to six prior tax years where the TP method is regarded by the Competent tax authorities as appropriate for those prior years. Rollback is not available for unilateral APAs.




Overview Taxpayers are strongly recommended to request a pre-filing meeting with the competent tax authorities, during which the following information will be discussed:

■■ necessary items for formal filing of an APA application;

■■ information necessary for the Taxpayer to decide whether to file the APA and what kind of APA filing is appropriate;

■■ whether the competent tax authorities can accept the APA application; and

■■ timeline of the application.



JAPAN (cont’d)




Formal APA applications must include:

■■ an outline of the transaction covered by the proposed APA and organisation(s) conducting those transactions;

■■ the arm’s length price computation method and explanation of why the proposed method is the most appropriate;


■■ transaction flows, money flows and currencies used;

■■ description of the capital relationships and ‘control in substance’ relationships between the foreign related parties and the Taxpayer;

■■ analysis on functions, risks and assets of the Taxpayer and related parties;

■■ description of the business operations, accounting and circumstances of the applicant and foreign related parties for the past three business years;

■■ outline of the issues concerned in any audit, administrative appeal, or lawsuit pertaining to transfer pricing of which the related party is subject in its jurisdiction;

■■ documentation that proves, based on TP methods applied to the three business years prior to the years covered by the proposed APA, that the TP method is the most rational; and

■■ overview of the ultimate parent company of the multinational enterprise to which the tax payer belong (for unilateral APA application only).

Language The documentation should be submitted in Japanese.


JAPAN (cont’d)



General A Taxpayer filing a formal APA application with paid-in capital of JPY 100m (approx. USD 906,000) or more must be submitted to the commissioner of the Taxpayer’s regional tax bureau. Taxpayers filing applications with paid-in capital of less this amount are required to submit applications to the director of the Taxpayer’s district tax office.


The Taxpayer must submit to the Competent tax authorities a report demonstrating compliance with the APA. The submission must be made prior to the deadline for filing the final tax return and must include:

■■ evidence that the Taxpayer has filed its return for the covered years in compliance with the APA;

■■ income statements of the applicant and foreign related parties (where deemed necessary);

■■ critical assumptions that were the premise for the APA;

■■ where results of the confirmed transaction do not comply with the APA, an explanation of the adjustments to prices that the Taxpayer has carried out; and

■■ financial circumstances of both the Taxpayer and the foreign related parties during the covered years.

The regional tax bureaux may also conduct audits of Taxpayer compliance with APAs, involving a site visit and request for additional information to verify the Taxpayer’s statements in the annual compliance reports.

Renewal procedure

An APA renewal request will go through the same stages as the initial APA request.

JAPAN (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

National Tax Agency (‘NTA’) and relevant regional tax bureau (‘Competent tax authorities’)

Relevant provisions

Commissioner’s Directive on the Mutual Agreement Procedure, and supplementary guidance issued by the NTA.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Japan is signatory.


Most of Japan’s DTTs permit Taxpayers to present a case to the Tax Authorities within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.

JAPAN (cont’d)




Requests for MAP assistance must be made by submitting, Application for the Mutual Agreement Procedure (‘Form 1’), together with the following documentation:

■■ a copy of a letter of assessment of the relevant taxation;

■■ written description of the facts related to the taxation and outline of position of the applicant or foreign related entity to such taxation;

■■ written description of how the taxation will result in taxation not in accordance with the relevant DTT;

■■ details of any relevant legal proceedings in relation to the taxation from foreign jurisdiction;

■■ if the taxation is in relation to transfer pricing, documentation describing the relationship of the related entities involved in the transaction(s);

■■ copies of any MAP requests made to foreign tax authorities; and

■■ any other documents that are relevant to the MAP request.

If the MAP request relates to a transaction(s) involving a consolidated subsidiary, its consolidated parent company must submit the application.

Language The documentation should be submitted in Japanese.




Arbitration Japan has signed several revised DTTs containing new arbitration procedures to be used where Japan and the relevant foreign jurisdiction cannot reach agreement within a specified time frame.

JAPAN (cont’d)


STATISTICS

APA There were 131 active bilateral APA applications during NTA’s operation year 2016 (as at 30 June 2017) and 143 completed applications. The NTA has had an APA program since 1987.

MAP Japan had a total of 456 active MAP applications as of 30 June 2017. The average time needed to close MAP cases is 28.9 months for transfer pricing cases, and 30.2 months for other cases.

JAPAN (cont’d)




Armenia(II), (VI)

Australia(VI)

Austria(I), (V), (VI)

Azerbaijan(II), (VI)

Bahamas(VI), (VI)

Bangladesh(VI)

Belarus(II), (VI)

Belgium(I), (V), (VI)

Bermuda(VI)

Brazil(VI)

Brunei(VI)

Bulgaria(VI)

Canada(VI)

Cayman Islands(VI)

Chile(I), (IV), (VI)

China(VI)

Czech Republic(VI)

Denmark(I), (V), (VI)

Egypt(VI)

Estonia(I), (V), (VI)

Finland(VI)

Fiji(VI)

France(VI)

Georgia(II), (VI)

Germany(I), (IV), (VI)

Guernsey(IV), (VI)

Hong Kong(I), (VI)

Hungary(VI)

Iceland(I), (V), (VI)

India(IV), (VI)

Indonesia(VI)

Ireland(VI)

Israel(VI)

Italy(VI)

Jersey(IV), (VI)

Kazakhstan(VI)

Kirghiz(II), (VI)

Kuwait(IV), (VI)

Latvia(I), (IV), (VI)

Lithuania(I), (V), (VI)

Luxembourg(VI)

Malaysia(VI)

Mexico(VI)

Moldova(II), (VI)

Netherlands(I), (VI)

New Zealand(I),

(IV), (VI)

Norway(VI)

Oman(IV), (VI)

Pakistan(VI)

Philippines(VI)

Poland(VI)

Portugal(I), (IV), (VI)

Qatar(IV), (VI),

Romania(VI)

Russia(II), (V), (VI)

Saudi Arabia(VI)

Singapore(VI)

Slovakia(VI)

Slovenia(I), (IV), (VI)

South Africa(VI)

South Korea(VI)

Spain(VI)

Sri Lanka(VI)

Sweden(I), (IV), (VI)

Switzerland(VI)

Taiwan(III), (IV), (VI)

Tajikistan(II), (VI)

Thailand(VI)

Turkey(VI)

Turkmenistan(II),

(VI)

Ukraine(II), (VI)

United Arab Emirates(IV), (VI)

United Kingdom(I), (IV), (VI)

United States(I),

(V), (VI)

Uzbekistan(II), (VI)

Vietnam(VI)

Zambia(VI)

JAPAN (cont’d)

NOTES










LUXEMBOURG

APA PROGRAM

KEY FEATURES

Competent authority

Luxembourg Tax Authorities (‘LTA’)

Relevant provisions

Section 29a Abgabenordnung (‘AO’);

Articles 56 and 56bis of the Luxembourg Income Tax Law (‘LITL’); and

Circular-Loi concernant l’impôt sur le revenu (‘LIR’) n° 56/1-56bis/1 dated 27 December 2016 (‘Circular’).



Acceptance criteria

The transaction to be covered under the proposed APA must adhere to the arm’s length principle and must not be purely tax driven. Financing companies that seek to enter into an APA with the LTA are required to determine remuneration on the basis of an analysis of the functions performed, assets used and risks assumed in relation to financing activities, and an economic analysis of data on comparable transactions. Financing companies must have a sufficient amount of equity in relation to its functions and this equity needs to be available if the risk in relation to the financing activities materialises. Luxembourg-based financing companies must meet capital and substance requirements and an appropriate arm’s length margin.


The LTA requires that the transaction(s) covered in the APA have not taken place before the Taxpayer applies for the APA.


Filing fee The filing fee for an APA is between EUR 3,000 (approx. USD 3,500) and EUR 10,000 (approx. USD 11,800), depending on the complexity of the application. The fee is due and fully payable within one month following confirmation by the LTA of the amount to be charged, following the initial review of the application.






Overview Pre-filing meetings are optional. A meeting with the LTA may take place in order to discuss the tax issues related to the transaction to be covered under the proposed APA.





The application should at least include the following elements:

■■ name, address and file number of the Taxpayer and the relevant entities involved in the transactions or arrangements which are covered by the application;

■■ a detailed description of all intra-group financing transactions, and legal arrangements or legislation referred to in the request accompanied by a detailed statement of the legal position of the applicant;

■■ qualifications of the relevant employees and description of their duties;

■■ any foreign jurisdiction(s) relevant to the transactions or arrangements;

■■ a presentation of the legal structure of the group, including information on the beneficial owner(s) of the capital of the Taxpayer;

■■ the tax years to be covered by the proposed APA;

LUXEMBOURG (cont’d)




■■ a transfer pricing study in compliance with the recommendations of the OECD guidelines, including:

– a description of the computation of equity allocation required to assume risks

– a description of the group and the interdependent links between the functions performed by the entities participating in the controlled transactions and the rest of the group, together with a description of the value creation in a broad sense within the group by the entities participating in the transactions

– a defined scope of the transactions

– a complete list of researched comparables

– a matrix of rejected potential comparables together with justifications of such rejections

– the final list of comparables selected and used to determine the arm’s length remuneration applied to the precisely defined intra-group transaction(s)

– a general description of market conditions

– an analysis of all relevant ancillary tax issues arising from the proposed methodology

– a list of APAs concluded in other countries in connection with the analysed transaction(s)

– a list of any APAs in connection with the analysed entity which are still in force at the time the request is submitted

– projected profit and loss accounts for the years covered by the request for the APA

The assurance that the information required to assess the facts is complete and truthful.

Language Documentation should be submitted in French or English.





General Taxpayers that seek to enter into an APA with the LTA should note that while pre-filing is optional, there are detailed guidelines that must be followed in relation to the transfer pricing study required as part of the APA application.


The tax returns of the Taxpayer must be in line with the content of the APA, with the appendices including computations demonstrating whether the transfer pricing requirements covered by the APA have been met. If the commercial accounts of the company do not adhere to the APA terms, the tax adjustments will be made.

Renewal procedure

There is no specific guidance for renewal procedures. Taxpayers may, after the term of the APA has elapsed, submit a new APA application to the LTA and include updated methodologies and analyses, which could result in different outcomes.



MAP PROGRAM

KEY FEATURES

Competent authority

Ministry of Finance

Relevant provisions

Circular No. 60 dated 28 August 2017 in respect of the Mutual Agreement Procedure.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Luxembourg is signatory.


Taxpayers have three years to present a case to the LTA under the EU Arbitration Convention (90/436/EEC).



The following information and documents must be attached to the MAP request:■■ name, address, and identification number of the Taxpayer;■■ the taxation year(s) in question;■■ the DTT concerned, including the article(s) which, in the

Taxpayer’s opinion, have been applied incorrectly;■■ description of all the facts relevant to the case, as well as the

documents in support of these facts;■■ analysis of the question(s) to be settled under MAP; and■■ copies of tax notices and proposals for rectification or

equivalent documents leading to the alleged double taxation.

In addition it will be necessary to indicate in the request whether:■■ the request for MAP has also been submitted to the relevant

foreign jurisdiction(s) concerned;■■ the question(s) to be settled has already been or will be dealt

with in an advance tax ruling, prior transfer pricing agreement, or a court judgment; and

■■ the documents and information provided are accurate and, that any other piece of information or document required will be transmitted or communicated in due time.

Language Documentation should be submitted in French or English.





Taxpayers may pursue domestic proceedings separately from the MAP process. In practice the domestic proceedings are usually suspended until the MAP has been finalised.

Arbitration As Luxembourg is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention (90/436/EEC) also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 163 application requests in 2015 and 145 completed applications. The LTA has had an APA program since 2011.

MAP Luxembourg had a total of 234 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 41 months for transfer pricing cases, and 18 months for other cases.





Andorra(IV)

Argentina(V)

Armenia

Austria

Azerbaijan

Bahrain(VI)

Barbados(VI)

Belgium(VI)

Brazil(VI)

Brunei(IV), (VI)

Bulgaria(VI)

Canada(VI)

China(VI)

Croatia(IV),

(VI)

Cyprus(V), (VI)

Czech Republic(IV), (VI)

Denmark(VI)

Estonia(I), (IV), (VI)

Finland

France

Georgia(VI)

Germany(I), (IV), (VI)

Greece(VI)

Guernsey(I), (IV),

(VI)

Hong Kong(I), (VI)

Hungary(VI), (VI)

Iceland (VI)

India(VI)

Indonesia(VI)

Ireland (VI)

Isle of Man(I),

(IV), (VI)

Israel(VI)

Italy(VI)

Japan

Jersey(I), (IV), (VI)

Kazakhstan(IV), (VI)

Korea (Republic of)(VI)

Laos(IV), (VI)

Latvia(VI)

Liechtenstein(I)

Lithuania(VI)

Macedonia(IV), (VI)

Malaysia(VI)

Malta(VI)

Mauritius(I), (VI)

Mexico(VI)

Moldova(VI)

Monaco(VI)

Morocco(VI)

Netherlands(VI)

Norway(VI)

Panama(VI)

Poland(VI)

Portugal

Qatar (VI)

Serbia(IV), (VI)

Singapore(IV), (VI)

Romania(VI)

Russia(VI)

San Marino(I), (VI)

Saudi Arabia(IV),

(VI)

Senegal(V), (VI)

Serbia(IV), (VI)

Seychelles(I), (IV),

(VI)

Slovak Republic(VI)

Slovenia(VI)

South Africa(VI)

Spain(VI)

Sri Lanka(IV), (VI)

Sweden(VI)

Switzerland(I), (VI)

Tajikistan(IV), (VI)

Taiwan(IV), (VI)

Thailand(VI)

Trinidad and Tobago(VI)

Tunisia(VI)

Turkey(VI)

Ukraine

United Arab Emirates(VI)

United Kingdom(VI)

United States

Uruguay(I), (IV), (VI)

Uzbekistan(VI)

Vietnam(VI)


NOTES



II denotes treaties between the countries’ representative office in Taipei and the Taipei Economic and Cultural Office in the relevant country.







MEXICO

APA PROGRAM

KEY FEATURES

Competent authority

Central Administrator for Transfer Pricing Audits, State Administration of Tax (‘SAT’)

Relevant provisions

Article 34-A of the Federal Tax Code;

Temporary Tax Regulations 2.12.7, 2.12.8, 3.3.1.28; and

Tax Procedure Matter 102/CFF of Annex 1-A of the Temporary Tax Regulations for 2017.



Acceptance criteria

There is no specific guidance; however, in practice requests are more likely to be successful if:

■■ the transfer pricing issues are complex and uncertainty exists as to how the arm’s length standard should be applied;

■■ a significant number of APAs relate to Maquiladora; and




APA term limits There is a five-year maximum term for an APA; however, this validity period may extended for bilateral and multilateral APAs negotiated under the MAP provisions of a DTT, and at the discretion of the relevant CA(s) involved.

Filing fee The filing fee for an APA is MX 216,309 (approx. USD 10,500)

The fee for an annual review is MX 43,262 (approx. USD 3,000)


APAs may be valid for the fiscal year in which they are requested, the immediately preceding year, and for up to three fiscal years following that in which they are requested. This validity period may extended for bilateral and multilateral APAs negotiated under the MAP provisions of a DTT, and at the discretion of the relevant tax authorities involved.



MEXICO (cont’d)


Overview Although there is not an explicit procedure for a pre-filing conference, in practice Taxpayers may, in conjunction with the Central Administration of International Fiscal Audit branch of the General Administration of Large Taxpayers within the SAT, analyse the information and TP method expected to be submitted for consideration.





The application should set out:

■■ the Taxpayer’s tax identification number and country of tax residency, indicating whether it has branches in Mexico;

■■ the name or corporate business name, tax identification number, and address of all related parties in Mexico or abroad, that have direct or indirect ownership in the equity of the Mexican Taxpayer; indicating direct shareholders, as well as the ultimate parent company of the holding company in line with the IFRS;

■■ the name or corporate business name, tax identification number, and address of all related parties in Mexico that have a business relationship with the Mexican Taxpayer; as well as any establishment, branches, warehouses, platforms, vessels, or areas where exploration or extraction of hydrocarbons that may be relevant regarding the TP method that is selected in the application;

■■ the name or corporate business name, tax identification number, and address of the foreign related parties that have a business relationship with the Mexican Taxpayer;

■■ the name or corporate business name, tax identification number, and address of all related parties in Mexico or abroad that may be involved in dealing with the response to the APA application request;




■■ the tax years intended to be covered under the proposed APA;

■■ the currency under which the transaction(s) to be covered were agreed between the Mexican Taxpayer and its related parties in Mexico or abroad;

■■ a description of the business activities of the group to whom the Taxpayer is part of, specifying the following:

– the background of the group to whom the Taxpayer is part

– a description of the relevant factors that generate profits for the group

– detail of transfer pricing policies implemented by the group

– a description of the main business activities carried out by the entities that are part of the group

– consolidated financial statements of the tax year for the group

– industry analysis of which the Taxpayer belongs in Mexico and abroad, describing current behavior and forecast, size, main competitors, its market position, access to substitute goods and services, competitors purchase power, and government regulations

– international financial structures used by the group

■■ a description of intangibles that belong to the group, including:

– the name and country of residence of the legal owner of the intangibles that belong to the group, and documentation supporting such ownership

– the name, country of residence and financial information of the companies that have recorded the ownership of the intangibles for accounting purposes

– the name and country of residence of the entities that carry out development activities, improvement, maintenance, protection and exploitation of intangibles that are owned by the group

MEXICO (cont’d)




■■ the name and country of residence of the entities that belong to the group that generate income, or have expenses with third parties, related to the business of the group; segregating them by income and expenses;

■■ a detailed description of the Taxpayer’s activities, including:

– a description of the activities carried out, assets used and risks assumed by the Taxpayer

– register of nominal shares as provided by art 128 of the General Corporate Law

– financial profits and loss statements of the Taxpayer for the three previous tax years, with a costs and expense breakdown, and of the local and foreign related parties that have a business relationship

– a statement verifying that annual and amended corporate tax returns where filed in the tax year for which the APA application is made, and the three previous tax years

– a copy of the dictamen fiscal (tax report), as well as audited financial statements and corresponding exhibits for the last three years

– contracts and agreements entered into between the Taxpayer and its Mexican or foreign related parties

– an operational chart through which names and roles can be identified in the corporate group of the Taxpayer and its Mexican and foreign related parties, as well as the geographical place where the activities are carried out

– a description of business strategies, specifying whether it has been or will carry out a restructure, through which functions, assets or activities would be migrated; changing its business operations

– a list of main competitors

MEXICO (cont’d)




■■ for the transactions or operations for which the Taxpayer is requesting an APA:

– a detailed description of the functions and activities carried out by the Taxpayer and the Mexican or non-resident related parties that maintain a contractual or business relationship with the Taxpayer, including a description of the assets held and the risks borne by each of the parties

– the TP method proposed by the Taxpayer to determine the transfer price, including the criteria and other objective elements used to demonstrate that the method is appropriate for the covered transaction(s) for which the Taxpayer is requesting an APA

– financial information corresponding to the fiscal years to be covered and an application of the proposed TP method to its intercompany transactions

– information on comparable transactions or companies, indicating the reasonable adjustments made to eliminate differences

– a statement indicating whether the Taxpayer’s non-resident related parties have been subjected to a transfer pricing audit by any tax authority and, if so, a description of the status of the audit

– information on whether the non-resident related parties are disputing a tax controversy related to the transfer pricing before the tax authorities of a court and, if so, a description of the status of that dispute.

Documentation indicating that the fees for the APA application have been paid must be submitted. All documentation must be submitted electronically.



MEXICO (cont’d)



General SAT follows a standard application and monitoring process. There are no unique procedural aspects.


As part of the APA process, SAT may request site visits for verification of the functional analysis, business purpose, and other relevant information.

Renewal procedure


MEXICO (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Central Administrator for Transfer Pricing Audits, State Administration of Tax (‘SAT’)

Relevant provisions


Acceptance criteria

Taxpayers resident for tax purposes in Mexico or a jurisdiction with which Mexico has a DTT may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of the DTT to which Mexico is signatory.


Most of Mexico’s DTTs permit Taxpayers to present a case to the Mexican Tax Authorities within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.



A MAP request must include the following:

■■ corporate name and the tax domicile of the Taxpayer and related parties involved in the transactions that are the subject of the MAP request;

■■ the federal tax identification, or tax identification for foreign residents of all related parties involved in the transactions that are the subject of the petition for the initiation of MAP;

■■ the reason for the MAP request;

■■ contact information of the foreign tax authority and, if possible, the regional or local unit of the national and/or foreign tax administration that has issued or intends to issue an act that is considered to contravene or implies a tax that is not in conformity with the DTT;

■■ address for receiving notifications, as well as the names of the persons authorised to receive the notifications;

MEXICO (cont’d)




■■ description of the activities to which the Taxpayer is engaged in and, as the case may be, the related parties involved in the transactions that are the subject of the MAP request;

■■ the measures taken by any of the foreign tax authorities that result or may result in taxation that is not in conformity with a DTT, specifying the article, provision and/or relevant part of the DTT that the Taxpayer considers to have been contravened, and their interpretation or opinion of the provision;

■■ the facts or circumstances related to the Taxpayer, including amounts, fiscal years or periods involved, data relating to the operation, relationships, circumstances and/or structure of operations, as well as an analysis of relevant issues raised;

■■ the information, documentation and/or evidence supporting the facts, acts, circumstances, and operations under analysis;

■■ in cases related to transfer pricing, documentation and /or evidence demonstrating that transactions with related parties subject to the MAP request were agreed according to the arm’s length principle (in addition to the above required information and documentation);

MEXICO (cont’d)




■■ manifestation under oath to tell the truth, stating whether:

– the Taxpayer or any of its related parties have requested the initiation of a MAP before the competent authorities of either Contracting State on the same subject matter of their application or any aspect related to it, stating the date and the tax authority to which it was submitted, enclosing a copy of all written documents and documents submitted, including correspondence or trades issued by the other tax authority in the MAP, as well as the requirements formulated. The information and documentation submitted to request the commencement of a MAP shall be the same as that provided to all competent authorities involved;

– the facts or circumstances of the request for the initiation of MAP have been the subject of proceedings before an administrative or judicial authorities in any of the Contracting States and, and if a decision was reached, a copy of that decision and the documentary evidence supporting the Taxpayer’s case;

– the request for the initiation of a MAP is related to situations, operations, structures, or issues that are being analysed or have been pronounced by the tax authorities of either Contracting State as a party of an APA, consultation, resolution, Conclusive Agreement or similar procedure and, if appropriate, provide documentary evidence relating to them.


– if the Taxpayer is subject to the exercise of the powers of verification by the Ministry of Finance and Public Credit or by the Federal Entities coordinated in federal income; and

– if the Taxpayer’s related parties are subject to such verification powers in Mexico.

MEXICO (cont’d)





– the Taxpayer’s related foreign parties involved in the transactions that are the subject of the MAP are under review by the tax authority of the other Contracting State, indicating the periods and the contributions under review, as well as the stage in which it is found; and

– that all the information and documentation provided within the request for the initiation of the MAP is true and that it undertakes to assist the tax authorities in the resolution of the case raised and in submitting the information and documentation that is required.

Language The documentation should be submitted in Spanish. A translation into English of the Taxpayer’s documentation must also be made available to the other relevant foreign tax authority.





STATISTICS


MAP Mexico had a total of 21 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 44 months for transfer pricing cases, and 28 months for other cases.

MEXICO (cont’d)




Argentina(IV)

Australia

Austria

Bahrain(IV)

Barbados

Belgium

Brazil

Canada(I)

China

Colombia(IV)

Czech Republic

Ecuador

Estonia(IV)

Finland

France

Germany

Greece

Hong Kong(IV)

Hungary(IV)

Iceland

India

Indonesia

Ireland(I)

Israel

Italy(IV)

Japan

Kuwait(IV)

Latvia(IV)

Lithuania(IV)

Luxembourg

Malta(IV)

Netherlands

New Zealand

Panama

Peru(IV)

Poland

Portugal

Qatar(IV)

Romania

Russia

Singapore(I), (IV)

Slovak Republic

South Africa

Spain

Sweden

Switzerland

Turkey(IV)

Ukraine(IV)


United Kingdom

United States(I)

Uruguay

MEXICO (cont’d)

NOTES










MOROCCO

APA PROGRAM

KEY FEATURES

Competent authority

Moroccan tax authority

Relevant provisions

Ministerial Decree No 2.16.571 of 3 July 2017 (Official Gazette No. 6594 of 10 August 2017)



Acceptance criteria

Moroccan resident Taxpayers that have direct or indirect dependency relationships with entities situated outside of Morocco may conclude an APA with the Moroccan tax authority.


Taxpayers are required to submit an APA application six months before the beginning of the year intended to be covered by the APA.

APA term limits There is a four-year maximum term for an APA.






Overview Taxpayers may take part in a preliminary meeting with the Moroccan tax authority. The purpose of this meeting is to discuss the nature of the information required in the APA application for the purposes of analysing the Taxpayer’s transfer pricing policy; plan a meeting schedule during the review and negotiation of the agreement; and any other requirements that might be necessary to conclude the APA application process.




MOROCCO (cont’d)



The APA application should include:

■■ identities of the associated entities;

■■ operations covered by the proposed APA;

■■ proposed duration of the APA;

■■ proposed TP method(s) to be used and critical assumptions relied upon in selecting such TP method(s);

■■ organisational structure of relevant entities;

■■ business plan of the Taxpayer;

■■ tax and financial documents of the relevant entities for the past four years, as certified by the relevant foreign tax authorities;

■■ accounting standards used by the relevant entities;

■■ business industry of the relevant entities;

■■ general description of the functions exercised, assets used, and risks assumed by the relevant entities;

■■ detailed description of intangibles held by the relevant entities;

■■ description of the target market of the business industry;

■■ description of controlled transaction(s);

■■ agreements between the relevant entities;

■■ cost-sharing arrangements between the relevant entities;

■■ any APAs concluded by the Taxpayer with foreign tax authorities, as well as any rulings issued by those jurisdictions; and

■■ identification, analysis, and selection of comparables, including supporting documents and potential adjustments for comparability purposes.


MOROCCO (cont’d)



During the review and negotiation stage, the Moroccan tax authority will analyse and evaluate the APA application and supporting documentation and, if a bilateral or multilateral APA, negotiate with the relevant tax treaty partner(s), before putting an agreement to the Taxpayer for signing. Further documentation may be requested during this stage.




General The Moroccan tax authority follows a standard pre-filing, application, and monitoring process. There are no unique procedural aspects.


Taxpayers must submit a report each year to the Moroccan tax authority that covers the following:

■■ evidence of the application of the transfer pricing method as specified under the APA;

■■ summary of any modifications of the original terms required due to changing circumstances;

■■ organisational structure of relevant entities; and

■■ a copy of the Taxpayer’s Annual Report.

Renewal procedure



MAP PROGRAM

KEY FEATURES

Competent authority

Moroccan tax authority

Relevant provisions

There are no specific provisions for MAP in domestic law.

Acceptance criteria












STATISTICS

APA There are no APA statistics publicly available.

MAP There are no MAP statistics publicly available.

MOROCCO (cont’d)


MOROCCO (cont’d)



Algeria

Austria

Bahrain

Belgium

Bulgaria

Canada

China

Croatia

Czech Republic

Denmark

Egypt

Finland(IV)

France

Gabon

Germany

Greece

Guinea

Hungary

India

Indonesia

Ireland

Italy

Ivory Coast

Jordan

Korea (Republic of)

Kuwait

Latvia

Lebanon

Luxembourg

Macedonia

Malaysia

Mali

Malta

Netherlands

Norway

Oman

Pakistan

Poland

Portugal

Qatar

Romania

Russia

Senegal

Singapore(IV)

Spain

Switzerland

Syria

Tunisia

Turkey

Ukraine


United Kingdom

United States

Vietnam(IV)

NOTES










NETHERLANDS

APA PROGRAM

KEY FEATURES

Competent authority

APA/Advance Tax Ruling (‘ATR’) team of the Dutch Tax Authority (‘APA/ATR team’)

Relevant provisions

Decree DGB 2014/3098 regarding the APA application procedure; and

Decree DGB 2014/296M regarding the organisational and competence aspects of the APA/ATR practices.



Acceptance criteria

The Netherlands provide APAs only if either:

■■ the Taxpayer or relevant parties conduct operational activities in the Netherlands, or can prove they have plans to do so; or

■■ the Taxpayer meets specified minimum substance and real risk requirements for intermediary holding companies and intergroup financing, licensing, and leasing companies.


There is no specific guidance. The critical dates negotiated with the APA/ATR team at the pre-filing meeting will determine the date from which the APA will commence.

APA term limits There is a five-year maximum term for an APA, although longer terms may be possible if the Taxpayer’s circumstances involve long term contracts.



Rollbacks are available if the facts and circumstances in prior years are comparable to those in the APA application, or if accurate adjustments can be made to the relevant prior years. For unilateral APA requests, rollback is available in case the rollback does not result in a decrease of taxable profits of still open years. For bilateral and multilateral APAs, the foreign tax authorities should agree with the rollback.



NETHERLANDS (cont’d)


Overview Pre-filing meetings with the APA/ATR team are available which provide the Taxpayer with the opportunity to obtain clarity on the documentation requirements and essential elements for a successful APA application. A joint case management plan can also be prepared in collaboration with the APA/ATR team, outlining the formal APA negotiation process and the anticipated timeline between formal filing and completion.





The APA/ATR team generally requires the following information to be submitted in an APA application:

■■ the names and addresses of the entities involved;

■■ the transactions, products, businesses or arrangements to be covered;

■■ a description of the enterprises and or PE’s involved in the transactions/agreements;

■■ the relevant foreign tax authorities involved;

■■ the global organisational structure, history, financial statement data, products, functions (including risks assumed) and assets (tangible and intangible) of the enterprises involved;

■■ a description of the proposed TP method, including a comparability analysis;

■■ critical assumptions underpinning the APA application and a discussion of the effect of changes in those assumptions or other events;

■■ the accounting period or fiscal years to be covered; and

■■ a description of market conditions including industry trends and competitive environment.

Language The documentation should be submitted in Dutch or English.



SME provisions A process designed to accommodate small businesses and specific support from the APA/ATR team for providing comparable data on independent enterprises is available for Taxpayers that meet the following requirements:

■■ the value of assets is not more than EUR 6m (approx. USD 7m);

■■ the net turnover for the financial year does not exceed EUR 12m (approx. USD 14.1m); and

■■ the average number of employees for the financial year is less than 50 (not available for entities engaging in financial service activities without a real economic presence in the Netherlands).


General The APA/ATR team follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer is required to indicate that they have obtained an APA in their tax return. Annual compliance reports are not required. Periodic audits by the APA/ATR team may take place to ensure compliance with critical assumptions included in the APA.

Renewal procedure

At the request of the Taxpayer, it can be evaluated whether a new APA can be concluded under the same conditions as those of an existing APA.

NETHERLANDS


MAP PROGRAM

KEY FEATURES

Competent authority

Directorate of Fiscal Affairs of the Ministry of Finance (‘Tax authorities’)

Relevant provisions

MAP Decree dated 29 September 2008, No. IFZ2008/248M (the ‘Decree’)

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which the Netherlands is signatory.


Taxpayers have three years to present a case to the Tax authorities under the EU Arbitration Convention (90/436/EEC).





A request for a MAP does not have a set form; however, according to the Decree, a written request should at least contain the following information:

■■ the name, address and identification number of the Taxpayer as well as those of any related foreign Taxpayer involved;

■■ information on the relevant facts and circumstances of the issues for which the MAP is requested, including on the relationship between the Taxpayer and foreign related parties involved;

■■ the other relevant jurisdiction(s) involved in the request;

■■ the DTT and relevant article(s), (or article 4 of the EU Arbitration Convention), that the Taxpayer asserts is not being correctly applied, and the Taxpayer’s interpretation of the application of these articles;

■■ the taxation years or periods involved;

■■ the relevant foreign jurisdiction(s) involved;

■■ copies of the tax assessment notices, tax audit report or equivalent leading to the alleged double taxation;

■■ details of any appeals and litigation procedures initiated by the Taxpayer or the other parties to the relevant transactions and any court decisions concerning the case; and

■■ an undertaking that the Taxpayer will respond as completely and quickly as possible to all reasonable and appropriate requests made by a tax authority and have documentation at the disposal of the tax authorities.

Language The documentation should be submitted in Dutch or English.

NETHERLANDS




Taxpayers may pursue Dutch domestic legal proceedings separately from MAP.

Arbitration As the Netherlands is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 221 APA application requests in 2017 and 132 completed applications. The average completion time was 24 months for bilateral and multilateral APAs. The APA/ATR team has had an APA program since 1994 based on a decree dated 19 October 1994, no IFZ94/855, although the decree was primarily for APA procedures in relation to the US. The APA/ATR team issues OECD conform rulings as of 1 April 2001.

MAP The Netherlands had a total of 297 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 37 months for transfer pricing cases, and 25 months for other cases.





Albania(I)

Argentina

Armenia

Australia

Austria

Azerbaijan

Bahrain(I)

Bangladesh

Barbados(I)

Belarus

Belgium

Bermuda(I)

Bosnia-Herzegovina

Brazil

Bulgaria

Canada(I)

China(IV)

Czech Republic

Croatia

Denmark

Egypt(I)

Estonia(I)

Ethiopia(IV)

Finland

France

Georgia(I)

Germany(I)

Ghana(I)

Greece

Hong Kong(I)

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Japan(I)

Jordan(I)

Kazakhstan

Korea

Kosovo

Kuwait(I)

Latvia(I)

Lithuania(I)

Luxembourg

Macedonia(I)

Malaysia

Malta

Mexico

Moldova(I)

Montenegro

Morocco

New Zealand

Nigeria

Norway(I)

Oman

Pakistan

Panama

Philippines

Poland(I)

Portugal(VI)

Qatar(I)

Romania

Russia

Saudi Arabia

Serbia

Singapore

Slovakia

Slovenia(I)

South Africa(I)

Spain(IV)

Sri Lanka

Sweden

Switzerland(I)

Surinam

Taipei(III)

Thailand

Tunisia

Turkey

Uganda(I)

Ukraine(I)

United Arab Emirates(I)

United Kingdom(I)

United States

Uzbekistan(I)

Venezuela

Vietnam

Zimbabwe

NETHERLANDS

NOTES










NEW ZEALAND

APA PROGRAM

KEY FEATURES

Competent authority


Relevant provisions

Part 5A of the Tax Administration Act; and general guidance available on the IRD’s website.


Unilateral, bilateral, and multilateral APAs are available under the private binding rulings regime.

Acceptance criteria




APA term limits There is no specific guidance for APA term limits. In practice there is usually a maximum term of five years.

Filing fee A flat fee of NZD 322 (approx. USD 226) is payable to the IRD. Any overseas travel is required for the completion of an APA, and the IRD will seek to recover out of pocket expenses on an actual and reasonable basis from the Taxpayer. An estimate of such costs will be provided to the Taxpayer prior to the travel being undertaken.



Collateral issues Applications from Taxpayers under investigation by the IRD for tax issues will be refused.


Overview Taxpayers intending to apply for an APA should contact for a pre-application meeting with a Principal Advisor (Transfer Pricing) to discuss the proposal informally. During the meeting the following will be discussed and presented for consideration:■■ an overview of the business operations;■■ background information on the foreign entities involved in the

transactions intended to be covered by the APA; and ■■ TP method intended to be applied.




NEW ZEALAND (cont’d)



After a successful pre-filing meeting the APA application will be formalised and submitted for consideration. This application should include:

■■ identification of the test party;

■■ analysis of key profit drivers and value added;

■■ a full functional analysis;

■■ the choice of TP method;

■■ a study of comparables;

■■ proposed application of methodology and comparables; and

■■ copies of all inter-company agreements.

Site visits and interviews may be required during the application review stage to inspect the actual operations of the relevant associated parties, especially where valuable intangibles are in issue and a residual profit split methodology is proposed.




General The IRD follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


Taxpayers are required to provide an Annual Compliance Report at the time of filing their annual returns and indicate whether or not they have adhered to the terms of the APA.

Renewal procedure

Taxpayers may request to renew an existing APA following the same process as it did to initiate the existing APA.



MAP PROGRAM

KEY FEATURES

Competent authority


Relevant provisions

There are no specific provisions for the MAP procedure in domestic law. Taxpayers must rely on the MAP provisions under DTTs, and informal guidance published on the IRD website.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which New Zealand is signatory.


Most of New Zealand’s DTTs permit Taxpayers to present a case to the IRD within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.




Taxpayers can facilitate the MAP by ensuring the tax authorities of both contracting states receive complete, accurate and timely information. Depending on what may be determined as a result of a pre-filing conference, the following information should be included in a taxpayer’s MAP submission:

■■ name, address and IRD number of the Taxpayer;

■■ the provision of the specific article of the DTT which the taxpayer considers is not being applied correctly by either one or both contracting states;

■■ the relevant facts of the case including any documentation substantiating these facts, the period involved and the amounts involved;

■■ an analysis of the issues involved supported by relevant documentation;

■■ where a request has also been made to the tax authority of the other contracting state, a copy of that submission;

■■ if the issue has been previously dealt with by some other means (such as an advance ruling, APA or settlement agreement), then a copy of any relevant ruling or agreement;

■■ if the MAP request has been submitted to another tax authority under another instrument that provides for a mechanism to resolve treaty-related disputes, then a copy of that submission (including all related documentation) unless the content of both MAP submissions are exactly the same;

■■ if the MAP request is “protective” (ie submitted to ensure compliance with a time frame provided under the relevant DTT but not to be examined until further notification from the taxpayer to do so), then a clear statement to this effect; and

■■ a final statement confirming that all information provided in the MAP request is accurate and additional information will be provided in a timely manner if required by the tax authority.





Taxpayers can initiate the MAP and the domestic disputes process simultaneously. Access to MAP is not limited with respect to matters resolved through the Disputes Review Unit. Requesting assistance to resolve a dispute under the MAP does not preclude any domestic action. A request for assistance under the MAP can be made even if an audit settlement has been agreed domestically. Furthermore, the IRD is legally bound to follow a domestic court decision in MAP cases, but is willing to enter into dialogue with other relevant foreign jurisdiction’s competent authorities to explain the New Zealand position in any case where double taxation may have arisen as a consequence.


STATISTICS

APA As at 30 June 2017, 170 APAs had been completed by the IRD.

MAP New Zealand had a total of 15 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 22 months for transfer pricing cases, and 19 months for other cases.





Australia(I)

Austria

Belgium

British Virgin Islands(IV)

Canada(IV)

Chile

China

Czech Republic

Denmark

Fiji

Finland

France

Germany

Hong Kong

India

Indonesia

Ireland

Italy

Japan(I), (IV)

Korea (Republic of)

Malaysia

Mexico

Netherlands

Norway

Papua New Guinea(IV)

Philippines

Poland

Russia

Samoa(IV)

Singapore

South Africa

Spain

Sweden

Switzerland

Taipei(III)

Thailand

Turkey


United Kingdom

United States

Vietnam(IV)


NOTES










NORWAY

APA PROGRAM

KEY FEATURES

Competent authority

MAP/APA unit of the Central Tax Office for Large Enterprises (‘Competent authority’)

Relevant provisions

Taxpayers must rely on the MAP provisions in DTT of which Norway is signatory to secure a bilateral or multilateral APA.


Bilateral and multilateral APAs are available. Unilateral APAs are available with respect to intra-group contracts for the sale or appropriation of oil and gas from the Oil Taxation Office (‘OTO’).

Acceptance criteria




APA term limits No specific guidance.










NORWAY (cont’d)



For unilateral APAs related to the sale or appropriate of oil and gas, Taxpayers are required to submit a proposal to the OTO that includes a proposed binding price, and the contract with the related party. The OTO may refuse the APA if it considers the factual basis provided by the Taxpayer in the proposal is weak. Decisions made by the OTO not to issue and APA are not appealable, and therefore it is important that the Taxpayer provides all information necessary for the OTO to make its decision, including time and place of delivery, risk and function allocation of costs, discounts, and the submission of comparables, resale prices to third parties, and database searches. If accepted, the OTO will issue a draft APA to the Taxpayer, either accepting the price proposed or determining that the price should be higher or lower. The OTO may also propose amendments to contractual terms and conditions for accepting the transaction price. The Taxpayer will be given a deadline to decide whether to accept the draft APA, and the APA will not be binding on the Taxpayer until after acceptance.




General No specific guidance.



Renewal procedure



NORWAY (cont’d)

MAP PROGRAM

KEY FEATURES

Competent authority

MAP/APA unit of the Central Tax Office for Large Enterprises (‘Competent authority’)

Relevant provisions

Taxpayers must rely on the MAP provisions in DTT of which Norway is signatory to secure a bilateral or multilateral APA, as well as informal guidance on MAP issued by the Competent authority.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Norway is signatory.


Most of Norway’s DTTs permit Taxpayers to present a case to the Competent authority within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.




A MAP application must be submitted in writing by letter or email. In all cases, it must contain the following information:

■■ the Taxpayer’s name and national ID number and/or organisation number;

■■ the Taxpayer’s address and other contact information;

■■ name of any contact person or representative, as well as any authority from the representative to act on behalf of the Taxpayer;

■■ the income years to which the case relates;

■■ the income that has been taxed not in accordance with the DTT;

■■ the provision(s) in the DTT that has/have been applied incorrectly, why this is incorrect and the state that has acted incorrectly;

■■ the Norwegian and/or foreign tax authority that has handled the case;

■■ factual information and documentation that is of importance for the case;

■■ circumstances of importance regarding whether the time limit for applying for a MAP has been complied with;

■■ whether the case has been appealed by means of an administrative appeal or is the subject of legal proceedings in Norway or the other state, as well as the status of any ongoing administrative or legal proceedings;

■■ whether the request is for the MAP to be initiated immediately or whether the Taxpayer prefers to wait for the outcome of other judicial remedies, such as appeals etc. in Norway and/or abroad;

■■ any opinions about how the case ideally should be resolved in the MAP;

■■ whether, as a result of an amendment of the tax assessment abroad, a claim has been brought against the Norwegian tax authority regarding an amendment of a foreign tax credit, income deduction for foreign tax or corresponding adjustment of income;

NORWAY (cont’d)




■■ a copy of the relevant tax assessment documents in both states, such as, but not limited to, tax assessments, tax returns, tax audit reports, notifications, replies, amendment resolutions, complaints, appeal decisions, etc;

■■ a copy of any communication in administrative or legal proceedings in Norway or the other state, including any decisions, settlements, rulings, etc; and

■■ confirmation that the Taxpayer has submitted all relevant information and will assist with further information if required.

In cases relating to transfer pricing, Taxpayers must also provide the following information:

■■ name and address, as well as organisation number or similar identification of the foreign taxpayer(s);

■■ a list of amendments to tax assessments in Norway and/or another state, divided by income year, where the amounts are stated in Norwegian kroner with specified exchange rates;

■■ a more detailed specification of the intra-group transactions to which the application relates, as well as information about other intra-group transactions that can be of significance for the assessment of the case;

■■ a copy of the Taxpayer’s transfer pricing documentation, including the master file (if prepared) and local files for affected entities:

– if transfer pricing documentation has not been prepared – an explanation of the background for this;

– if there is no transfer pricing documentation, the Norwegian Competent authority may require the taxpayer to provide corresponding information that would have been included in the transfer pricing documentation

NORWAY (cont’d)




■■ a functional and comparability analysis, including an overview and description of functions, significant assets and risks that each of the parties in the transaction(s) perform, own or control as well as specific information about intangible assets owned, transferred or of significance to the business;

■■ an account of the selection of TP method, including lists or extracts from accounts that substantiate the selected TP method;

■■ a short presentation of the taxpayer’s/group’s value chain;

■■ an overview of the group structure and an account of the affected enterprises’ relationships/ownerships, including both legal and operational relationships;

■■ whether a MAP request has been sent to the other state in respect of the same case. A copy of the request must be attached;

■■ a copy of the financial accounts for the MAP years in both/all involved states;

■■ information about any bilateral or unilateral APAs or any other agreement (advance ruling, etc.) that is of significance to the case;

■■ a copy of any valuation reports, valuations, etc. that are of significance to the case; and

■■ a copy of intra-group or external agreements etc. that have been entered into that are of significance to the case.

Language MAP applications and accompanying documentation are accepted in Norwegian, English, Danish, or Swedish.

NORWAY (cont’d)




Taxpayers can apply for MAP assistance even if they have also taken steps to make use of judicial remedies such as administrative appeals or lawsuits in Norway. However, in order to avoid the same case being handled in parallel in MAP negotiations and through administrative appeals or lawsuits, this process will be coordinated according to two main principles:

■■ the Taxpayer is able to determine their choice of judicial remedy; and

■■ the Competent authority is able to determine how to best approach the MAP case before it, for instance when the MAP process should start.

When a case is resolved through MAP negotiations, it will be stipulated as a condition for the implementation of the agreed MAP solution in Norway that the Taxpayer withdraws the legal proceedings in the courts. Conversely, when the Taxpayer chooses to pursue a case in the Norwegian courts that results in a decision on the issues covered by the MAP application, the Competent authority will not deviate from the result of the court proceedings in a subsequent MAP regarding the same issues. This also applies when the Taxpayer and Competent authorities have reached a settlement regarding the tax assessment according to the provisions in the Civil Procedure Act.


STATISTICS

APA As of October 30, 2017, Norway is signatory to 86 DTTs that are principally for the elimination of double taxation and the prevention of tax evasion and avoidance, as well as 40 tax information exchange agreements.

MAP Norway had a total of 75 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 36 months for transfer pricing cases, and 33 months for other cases.

NORWAY (cont’d)




Albania

Argentina

Australia

Austria

Azerbaijan

Bangladesh

Barbados

Belgium

Benin

Bosnia-Herzegovina(II)

Brazil

Bulgaria

Canada

Cayman Islands

Chile

China

Croatia

Cyprus

Czech Republic

Denmark

Egypt

Estonia

France

Gambia

Georgia

Germany

Greece

Guernsey

Hungary

India

Indonesia

Ireland

Isle of Man

Israel

Italy

Ivory Coast

Jamaica

Japan

Jersey

Kazakhstan

Kenya

Korea (Rep.)

Latvia

Lithuania

Luxembourg

Macedonia

Malawi

Malaysia

Malta

Mexico

Morocco

Nepal

Netherlands(I)

New Zealand

Philippines

Poland

Portugal

Qatar

Romania

Russia

Senegal

Serbia

Singapore

Slovak Republic

Slovenia

South Africa

Spain

Sri Lanka

Switzerland(I)

Tanzania

Thailand

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan

Uganda

Ukraine

United Kingdom(I)

United States

Venezuela

Vietnam

Zambia

Zimbabwe

NORWAY (cont’d)

NOTES










PERU

APA PROGRAM

KEY FEATURES

Competent authority

Peruvian Tax Authority (‘SUNAT’) and the General Director of SUNAT or his delegate (‘Tax authorities’)

Relevant provisions

Article 32 of Income Tax Code; and

Resolution No. 377 2013/SUNAT: Provisions relating to advance pricing agreements between domiciled Taxpayers and SUNAT.



Acceptance criteria

Requests are more likely to be successful if:

■■ transfer pricing issues are complex and uncertainty exists as to how the arm’s length standard should be applied; and




APA term limits There is a four-year maximum term for an APA.

Filing fee No specific guidance.


APA are available for a maximum of three fiscal years following that in which they are requested.



Overview Taxpayers may request a pre-filing meeting, although this is optional.






The application should provide information and documentation necessary for explaining the facts and circumstances of the Taxpayer and selected TP method, including:

■■ the Taxpayer’s name, business address, tax identification number and country of residency of the related entity;

■■ a description of the principal activities of the group, including the place or places where the activities are carried out;

■■ a description of the transaction(s) between the Taxpayer and the related entity;

■■ a detailed description of the functions and activities carried out by the Taxpayer and the Peruvian or non-resident related parties that maintain a contractual or business relationship with the Taxpayer, including a description of the assets held and the risks born by each of the parties;

■■ the TP method(s) proposed by the Taxpayer to determine the transfer price, including the criteria and other objective elements used to demonstrate that the method is appropriate for the covered transaction(s);

■■ information on comparable transaction(s) or companies, indicating the reasonable adjustments made to eliminate differences; and

■■ any other documentation or information necessary or as required by the Tax authorities.







Renewal procedure No specific guidance.

PERU (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Peruvian Tax Authority (‘SUNAT’) and the General Director of SUNAT or his delegate (‘Tax authorities’)

Relevant provisions


Acceptance criteria












STATISTICS

APA There are no APA statistics publicly available.

MAP There are no MAP statistics publicly available.

PERU (cont’d)




Brazil

Chile

Colombia


Mexico(IV)

Portugal(IV)

Spain

Switzerland(IV)

PERU (cont’d)

NOTES










POLAND

APA PROGRAM

KEY FEATURES

Competent authority

The Head of National Fiscal Administration (‘Tax authority’)

Relevant provisions

Unit IIa, arts 20a-20r of the Tax Ordinance Act 1997



Acceptance criteria



Unilateral APAs should be concluded within six months; bilateral APAs should be concluded within 12 months; and multilateral APAs should be concluded within 18 months.

APA term limits Restricted to a maximum of five years, with possibility of renewal for subsequent periods no longer than five years.

Filing fee 1 percent of the transaction value and with the following thresholds:

Domestic unilateral agreement PLN 5,000-50,000 (approx. USD 1,365-13,650)

Foreign unilateral agreement PLN 20,000-100,000 (approx. USD 5,460-27,300)

Bi/multilateral agreements PLN 50,000-200,000 (approx. USD 13,650-54,600)

Fee for renewal amounts to half the fee for the original APA application.


Rollback for prior years is not available. APAs can only apply prospectively from the day of submission of the APA application.




Overview The Taxpayer may consult with the Tax authority in relation to the expediency of concluding the APA, the information required to be included in the application, the procedure and expected time of concluding the APA, and the expected conditions and validity attached to it once effective.





APA applications must include the selected TP method for fixing the transaction price (or the selected method of the division of costs in the case of APA applications concerning the division of costs). Specifically applications must present include:

■■ a description of application of the proposed TP method:

a) principles for calculating the transaction price;

b) financial forecasts that the transaction price calculation is to be based on; and

c) an analysis of the comparison data used for the transaction price calculation.

■■ circumstances which may affect the correct setting of the transaction price:

a) conditions set between parties and a description of the course of the relevant transaction between the related parties;

b) analyses of assets, functions and risks of parties, and descriptions of the transaction related costs envisaged;

c) a description of an economic strategy or any other circumstances that may affect the transaction price;

POLAND (cont’d)




d) data concerning the economic situation of the branch of the industry in which the applicant pursues its activity and data concerning business transactions made by unrelated entities used for calculating the transaction price; and

e) the organisational and capital structure of the applicant and affiliated entities, and financial accounting principles applied by them.

■■ documents exerting an important influence on the conditions of the transaction, in particular texts of agreements, arrangements and other documents indicating the intentions of parties to the covered transactions;

■■ the proposed duration of the APA with an indication as to whether the application is intended to commence on the day of submitting the APA application;

■■ a list of related entities with whom the APA will be concluded and their consent to submit required documents to the Tax authority; and

■■ a description of critical assumptions backing the proposed TP method in accordance with the arm’s length principle.

Acceptance of the specified TP method in the APA is delivered in the form of an administrative decision by the Minister of Finance.

Language The documentation should be submitted in Polish.



General The Tax authority follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must provide an annual report together with their tax return for the duration of the APA.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry. Renewals will be allowed if the elements set in the APA decision issued by the Minister of Finance for setting the transaction price between affiliated entities has not materially changed.

POLAND (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Ministry of Finance

Relevant provisions

Decree of the Ministry of Finance of 10 September 2009, as amended on 18 July 2013.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Poland is signatory.


Most of Poland’s DTTs permit Taxpayers to present a case to the Polish Ministry of Finance within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit. Taxpayers have three years to present a case to the Ministry of Finance under the EU Arbitration Convention (90/436/EEC).



In order for the MAP request to be accepted, it must include the following:

■■ names, addresses and tax identification numbers of the Polish Taxpayer entity and relevant foreign related parties;

■■ a description of the facts of the case, taking into account the existing links between the domestic entity and related entities;

■■ specification of the tax year for which the application relates;

■■ copies of tax decisions, inspection reports or other documents evidencing the occurrence of double taxation;

■■ information on tax or court proceedings initiated by the Taxpayer or related entities, including court judgments issued in the case;

■■ justification of the application, in particular setting out the application of the principles set out in article 4 of the EU Arbitration Convention (arm’s length principle); and

POLAND (cont’d)




■■ statement by the domestic entity that it is ready to provide full documentation without delay, and any information that may affect the outcome of the case.

The MAP request should be accompanied by tax documentation, financial statements, trade agreements on transactions, benchmarking used by parties to determine remuneration or transaction prices, audit reports or tax decisions that indicate that double taxation has occurred or may occur, and all correspondence with foreign administrations tax, which results in the principles of an extra-valuation.

Language The documentation should be submitted in English or Polish.



Taxpayers may pursue Polish domestic legal proceedings separately from MAP. Any means of appeal available under the domestic law is without prejudice to the MAP.

Arbitration As Poland is a member of the European Union, taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were eight APA application requests in 2015 and six completed applications. The average completion time was 18 months for bilateral and multilateral APAs. The regulations with respect to APAs first came into force in 2006.

MAP Poland had a total of 78 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 38 months for transfer pricing cases, and 19 months for other cases.

POLAND (cont’d)


POLAND (cont’d)



Albania

Armenia

Australia

Austria

Azerbaijan

Bangladesh

Belarus

Belgium(I)

Bosnia-Herzegovina

Bulgaria

Canada(IV)

Chile

China

Croatia

Cyprus

Czech Republic(IV)

Denmark

Egypt

Estonia

Finland(IV)

France

Georgia

Germany

Greece

Guernsey(IV)

Hungary

Iceland

India

Indonesia

Iran

Ireland

Isle of Man(IV)

Israel

Italy

Japan

Jersey(IV)

Jordan

Kazakhstan

Korea (Republic of)

Kuwait

Kyrgyzstan

Latvia

Lebanon

Lithuania

Luxembourg

Macedonia

Malaysia(IV)

Malta

Mexico

Moldova

Mongolia

Montenegro

Morocco

Netherlands(I)

New Zealand

Norway(IV)

Pakistan

Philippines

Portugal(VI)

Qatar

Romania

Russia

Saudi Arabia(IV)

Serbia

Singapore(IV)

Slovak Republic

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland(I)

Syria

Taipei(III), (IV)

Tajikistan

Thailand

Tunisia

Turkey

Ukraine


United Kingdom

United States

Uzbekistan

Vietnam

Zimbabwe

NOTES










PORTUGAL

APA PROGRAM

KEY FEATURES

Competent authority

Large Taxpayers Unit of the Portuguese Tax Authority (‘PTA’)

Relevant provisions

Article 138 of the Code of Taxation of Income and Gains of Collective persons; and

Ministerial Order Portaria nº 620-A/2008 of 16 July 2008.



Acceptance criteria



The APA proposal must be presented at least 180 days before the beginning of the applicable tax year. The PTA is required under Ruling 620-A/2008 to complete the APA process within 180 days for unilateral applications, and 360 days for bilateral and multilateral applications.

APA term limits There is a three-year maximum term for an APA.

Filing fee The filing fee is between EUR 3,150 (approx. USD 3,700) and EUR 35,000 (approx. USD 41, 250), depending on Taxpayer turnover. The amount is calculated by applying the set of rates established in Ruling 923/99 of 20 October 1999 to the mathematical average of the Taxpayer’s turnover for the three taxable years prior to the filing of the APA application.





PORTUGAL (cont’d)


Overview Submission of a written request to initiate a preliminary evaluation of the agreement’s terms and conditions is a mandatory step in the APA application process. The preliminary evaluation involves:

■■ an analysis of the Taxpayer’s transfer pricing policy;

■■ an analysis of whether an APA is available in the circumstances and the most appropriate solution; and

■■ a determination of the documentation and information required in the formal APA application.

The request must include a description of the activities carried out by the entity, related-party transactions, the related entities, the APA proposal description and other relevant documents. The preliminary phase may involve joint meetings with the PTA.





The content of the APA proposal will be discussed during the preliminary phase, but the application must at least include:

■■ identification of the entities involved;

■■ description of the activities carried out by the entities;

■■ a proposal on the methods for determining TP methods and supporting documentation;

■■ description of the transactions included;

■■ the proposed duration;

■■ confirmation of the simultaneous submission of the APA application to the different tax authorities; and

■■ a declaration of cooperation from the Taxpayer that they will provide all necessary information.



Language Documentation in foreign languages must be translated to Portuguese at the request of the PTA.



General The PTA follows a standard pre-filing, application and monitoring process. There are no unique procedural features.


The Taxpayer must file an annual report with their tax return demonstrating compliance with the terms and conditions for each taxable year covered by the APA.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry. An APA renewal request will go through the same stages as the initial APA request. Renewal fees are reduced by 50 percent.

PORTUGAL (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Large Taxpayers Unit of the Portuguese Tax Authority (‘PTA’)

Relevant provisions

Articles 18.º and 19 of Ministerial Order n.º 1446-C/2001; and Article 2.º of Ministerial Order nº 620-A/2008 of 16 July 2008.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Portugal is signatory. Under article 1(1) of the EU Arbitration Convention (90/436/EEC), taxpayers may also request a MAP when income included in the profits of an enterprise of a Contracting State are or may be equally included in the profits of an enterprise from another Contracting State.


If requested under a Portuguese DTT, Taxpayers must make a MAP request before the deadline stipulated established under the relevant DTT, from the date of the PTA notification which leads or may lead to double taxation. If requested under the EU Arbitration Convention, Taxpayers have three years to present a case to the PTA.



Requests for transfer pricing correlative relief must be in writing and must include specific information including:

■■ the identification of the relevant parties;

■■ a description of the facts and circumstances of the case, including a description of the special relationships and the carried-out operations;

■■ the relevant tax periods;

■■ characterisation and supporting documentation of the adjustments made by the foreign tax authority that resulted in or may result in the alleged double taxation; and

■■ proposal concerning one or more solutions for the purpose of solving the case.

PORTUGAL (cont’d)




All other requests must at least include:

■■ the identification of the relevant parties and foreign jurisdiction(s);

■■ description of the facts and circumstances of the case and relevant documentation;

■■ indication of the relevant tax periods;

■■ identification of legal provisions that are not being properly applied by the foreign jurisdiction(s) and analysis and interpretation of their correct application; and

■■ whether an application has also been submitted in the other jurisdiction(s).

Language The request must be presented in Portuguese. Documentation in foreign languages must be translated to Portuguese at the request of the PTA.



Taxpayers may pursue Portuguese domestic legal proceedings separately from MAP. If any internal proceedings are underway, they should be disclosed in the MAP request.

Arbitration As Portugal is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

PORTUGAL (cont’d)


STATISTICS

APA There were two APA application requests in 2015 and three completed applications. In total, there have been seven APAs granted (all unilateral). The PTA has had an APA program since 2008.

MAP Portugal had a total of 61 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 52 months for transfer pricing cases, and 19 months for other cases.

PORTUGAL (cont’d)


PORTUGAL (cont’d)


The following treaties include MAP provisions which are the basis for bilateral and multilateral APA negotiations: 1

Algeria

Andorra (IV) (VI)

Austria(VI)

Barbados (V) (VI)

Bahrain (IV)

Belgium

Brazil

Bulgaria(VI)

Canada

Cape Verde

Chile

China(VI)

Colombia (IV)

Croatia (IV)

Cuba(VI)

Cyprus (IV)

Czech Republic

Denmark(VI)

Estonia(VI)

Ethiopia (IV) (VI)

France (VI)

Georgia (IV) (IV)

Germany

Greece(VI)

Guinea-Bissau

Hong Kong(IV), (VI)

Hungary(VI)

Iceland

India

Indonesia(VI)

Ireland

Israel

Italy

Ivory Coast (IV) (VI)

Japan(I), (IV), (VI)

Korea(VI)

Kuwait (IV)

Latvia(VI)

Lithuania

Luxembourg

Macao

Malta

Mexico

Moldova

Montenegro (V)

Morocco

Mozambique

Mozambique

Netherlands(VI)

Norway

Oman (IV) (VI)

Pakistan(VI)

Panama(VI)

Peru (IV)

Poland(VI)

Qatar (IV) (VI)

Romania(VI)

Russia

San Marino (IV)

Sao Tome and Principe (IV) (VI)

Saudi Arabia (IV) (VI)

Senegal (IV)

Singapore(VI)

Slovakia

Slovenia(VI)

South Africa(VI)

Spain(VI)

Sweden(VI)

Switzerland(VI)

Timor Leste (v)

Tunisia(VI)

Turkey

Ukraine


United Kingdom

Unites States(VI)

Uruguay

Venezuela(VI)

Vietnam (IV) (VI)

1 For multilateral APAs, Ministerial Order nº 620-A/2008 provides that the MAP provisions under DTTs must be identical to the wording of para 3, art 25 of the OECD Model.

NOTES










ROMANIA

APA PROGRAM

KEY FEATURES

Competent authority

National Agency for Tax Administration (‘NATA’)

Relevant provisions

Article 52 of Law 207/2015 of the Fiscal Procedural Code; and Order 3735/2015 for the procedure on the issuance and modification of APAs and the amendment of APAs.



Acceptance criteria



NATA will issue a decision on the APA application within 12 months for unilateral agreements; and 18 months for bilateral or multilateral APAs. If NATA requests additional information, the term will be extended with the period between the date of the request and the date when such information was provided to them (that should be no longer than 60 working days when the information is requested from the Taxpayer and six months when information is requested from tax authorities from other jurisdictions). After analysing the request, NATA will issue a draft APA for expressions of opinion and the Taxpayer will have 60 working days to respond. If the APA is issued and the Taxpayer does not agree with the content, the Taxpayer has the right to submit a notification to NATA within 30 days from the date the APA was issued.

APA term limits There is a five-year maximum term for an APA. NATA may approve longer validity periods for long term intra-group agreements.

Filing fee Large Taxpayers and/or value of transaction over EUR 4m (approx. USD 4.72m):

New APAs EUR 20,000 (approx. USD 23,600)

Amendments EUR 15,000 (approx. USD 17,700)


ROMANIA (cont’d)


Filing fee (cont’d) All others:

New APAs EUR 10,000 (approx. USD 11,800)

Amendments EUR 6,000 (approx. USD 7,070)

If an APA application is rejected by NATA, the Taxpayer may request a refund of the fee paid.


The general rule is for an APA to enter into force starting from the fiscal year following the one when the transaction was concluded. By way of exception, APAs may also apply starting from the fiscal year in which the application was submitted or the APA was issued, provided that certain conditions are met.

Collateral issues If the transaction(s) covered by the APA and/or the Taxpayer is subject to any fiscal, administrative or criminal procedure, this will result in the rejection of the APA application.


Overview The Taxpayer may request a meeting with the representatives of NATA prior to submitting the APA request. This is highly recommended as it provides for the opportunity of the Taxpayer to present:

■■ the business currently carried out and anticipated to be carried out in Romania, as well as the overall activity of the Taxpayer and intercompany transactions; and

■■ the transaction covered by the APA, including the nature, pricing model, parties involved, and estimated financial results.

Further to this pre-filing meeting, NATA will confirm if the transaction(s) qualify for an APA. There is no obligation to submit or present any documentation to NATA for the purpose of the meeting.






The APA application must include the following:

■■ a description of the transaction to be covered under the proposed APA;

■■ details of the Taxpayer and of the affiliated person(s)/PE involved in the transaction;

■■ an overview of the organisational, legal and operational structure of the group, a list of group entities and their geographical location, and shareholdings within the group;

■■ a general description of the activity of the group and of the Taxpayer, business strategy, including any changes that have occurred prior to submitting the request;

■■ a description of the main functions performed, risks borne and assets used by each entity in the group that contribute significantly to defining and creating value;

■■ a description of intangible assets’ owners within the group and of the relevant property rights, the arrangements for costs contributions, or any research and development activities;

■■ a description of any cost contribution arrangements concluded by the Taxpayer with affiliated parties;

■■ a description of business restructurings of which the Taxpayer was involved prior to submitting the APA application;

■■ a description of the transaction to be carried out between the Taxpayer and an affiliated person/PE that will be subject to the APA, highlighting the particulars of such transactions and including transactional flows, invoicing flows, and estimated value of the transaction;

■■ a general description of the transfer pricing policy applicable at the level of the Taxpayer;

■■ a detailed presentation of the functional analysis and comparability analysis, including contractual terms of the transaction (copies of the draft agreement to be concluded between the parties should be included as an annex);

ROMANIA (cont’d)




■■ description of the TP method chosen to set up pricing for the transaction covered under the proposed APA, together with details on how the tested party was established;

■■ the date from which the APA is to enter into force and its validity period;

■■ presentation of the critical presumptions that may influence the proposed APA;

■■ reference to the relevant foreign tax authorities involved in the APA;

■■ proof of payment of the APA filing fee;

■■ documentation of any APAs concluded with other foreign tax authorities that are related to the relevant transaction of the proposed APA, but to which NATA is not a party; and

■■ affidavits confirming the accuracy of the information included within the APA request, as well as any criminal or fiscal investigations over the transaction subject to the request.

Language The documentation must be in Romanian. If the Taxpayer has any documentation related to the transaction in another language, it needs to be accompanied by Romanian authorised translations.



General NATA follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must submit annual reports regarding the manner in which the terms and conditions described and approved through the APA are fulfilled.

Renewal procedure

The Taxpayer may request an extension of an APA in writing at least 30 days prior to the end of the validity period of the existing APA, provided that the conditions covered by the existing APA remain unchanged. The Taxpayer may amend an existing APA if the conditions of the transaction covered under the APA have changed.

ROMANIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

National Agency for Tax Administration (‘NATA’)

Relevant provisions

Title IX from the Law 207/2015 of the Fiscal Procedural Code

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Romania is signatory.


If requested under a Romanian DTT, Taxpayers must make a MAP request before the deadline stipulated established under the relevant DTT, from the date of the NATA notification which leads or may lead to double taxation. Taxpayers have three years to present a case to NATA under the EU Arbitration Convention (90/436/EEC).



The MAP request should include the following:

■■ the reason for the MAP request, as well as the fiscal identification data of the affected Taxpayer;

■■ to the extent possible, the identification data of the other tax authority involved and/or taxpayers/residents in the relevant foreign jurisdiction;

■■ the article(s) of the DTT or Arbitration Convention that are considered to be violated, and the Taxpayer’s interpretation in this respect;

■■ the opinion of the Taxpayer affected on how to remedy the double taxation;

■■ fiscal years and amounts subject to the double taxation;

ROMANIA (cont’d)




■■ in all cases where double taxation is generated by transfer pricing adjustments, a detailed description of the structure of the transactions subject to the double taxation, the related persons involved and the manner in which the double taxation has been generated, with the presentation of the transfer pricing file for those transactions, if available;

■■ a summary of the facts and an analysis of the issues for which MAP is requested, with the submission of supporting documents, as appropriate, respectively details of the facts and circumstances relevant to the case;

■■ a copy of any other relevant MAP request and the associated documents filed, or to be filed, with the tax authority of the other contracting state, including copies of correspondence from the other tax authority, copies of briefs, objections/complaints submitted in response to the action that generated the double taxation;

■■ a statement regarding the existence/non-existence of a prior request to the tax authority of either contracting state on the same or related issue;

■■ information on the legislation of the other State regarding prescription periods or other particularities of tax legislation that may affect the implementation of any commonly agreed decisions between the two tax authroties, if available;

■■ details of legal remedies and procedures initiated by the person concerned with respect to relevant transactions and court decisions on the subject of the MAP;

■■ in all cases where a person to act as an authorised representative is appointed, the presentation in original of a document, drawn up according to the legal provisions, indicating the quality of the designated person(s) and the limits of the power of attorney;

ROMANIA (cont’d)




■■ the submission of other data/information or documents considered relevant by the person affected, including a copy of any arrangements or an agreement reached with the other Contracting State that might affect the conduct of the MAP, if applicable; and

■■ any other specific additional information requested in writing by the tax authorities involved that are considered necessary to carry out the substantive examination of the case in question.




Taxpayers may pursue Romanian domestic legal proceedings separately from MAP; however, if a resolution is reached through MAP negotiations, the domestic litigation must be discontinued before its implementation.

Arbitration As Romania is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were two APA application requests in 2015 and four completed applications.

MAP Romania does not make publicly available statistics on MAP requests.

ROMANIA (cont’d)


ROMANIA (cont’d)



Albania

Algeria

Armenia

Australia

Austria

Azerbaijan

Bangladesh

Belarus

Belgium

Bosnia-Herzegovina

Bulgaria(IV)

Canada

China

Croatia

Cyprus

Czech Republic

Denmark

Ecuador

Egypt

Estonia

Ethiopia

Finland

France

Georgia

Germany

Greece

Hong Kong(IV)

Hungary

Iceland

India(IV)

Indonesia

Iran

Ireland

Israel

Italy

Japan

Jordan

Kazakhstan

Korea (Democratic People’s Republic of)

Korea (Republic of)

Kuwait

Latvia

Lebanon

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mexico

Moldova

Montenegro

Morocco

Namibia

Netherlands

Nigeria

Norway

Pakistan

Philippines

Poland

Portugal(VI)

Qatar

Russia

San Marino

Saudi Arabia

Serbia

Singapore

Slovakia

Slovenia

South Africa

Spain(IV)

Sri Lanka

Sudan

Sweden

Switzerland

Syria

Tajikistan

Thailand

Tunisia

Turkey

Turkmenistan

Ukraine


United Kingdom

United States

Uruguay

Uzbekistan

Vietnam

Zambia

NOTES










RUSSIA

APA PROGRAM

KEY FEATURES

Competent authority

Federal Tax Service of Russia (‘FTS’)

Relevant provisions

Articles 105.19-105.25 of the Russian Tax Code (‘RTC’)

On 29 March 2018 the Ministry of Finance of Russia issued an Order on the procedure for conclusion of bilateral APAs with the authorised bodies of foreign states (published on 3 May 2018).



Acceptance criteria

Requests are more likely to be successful if transfer pricing issues are not complex, and involve transactions that have various comparables recognised domestically and internationally.


An APA will only come into force as of January 1 of the calendar year following the year in which it was signed.

APA term limits There is a three-year maximum term for an APA.

Filing fee RUB 2m (approx. USD 32,100)






Overview There is no specific guidance in the RTC. The Order introduces a pre-filing stage for the conclusion of bilateral APAs.

Pre-filing is an optional (but advisable) stage, which allows the Taxpayer and FTS to weigh up the prospects of a successful conclusion of an APA. An application for a pre-filing negotiation stage must include:

■■ Information relevant to the conclusion of APA:

– the name and tax residence country of the parties involved;

– the global group structure;

– a description of cross-border transactions; and

– the proposed TP method.

■■ Issues to be considered:

– the existence of the grounds for entering into an APA;

– the procedure for determining prices and/or applying TP method suggested by the taxpayer;

– the procedure and timeline for entering into the APA,

– the prospects for mutual agreement between the competent authorities and its implementation in the Russian Federation.

The results of these preliminary negotiations are not legally binding.



RUSSIA (cont’d)




The procedure for APAs is initiated by submitting a formal application in a prescribed form, together with all necessary documents. The application should contain the following information:

■■ the name and tax residence country of the parties involved;

■■ the global group structure;

■■ a description of cross-border transaction(s) to be covered;

■■ actual conditions relevant to the cross-border transaction(s);

■■ arm’s length conditions relevant to the cross-border transaction(s);

■■ the proposed TP method and expected result of the proposed method;

■■ financial performance; and

■■ information on the outcome of the application of the proposed TP method, using as an example of the most recent three years for which factual information is available.

Language Documentation should be submitted in Russian.

SME provisions Unilateral APAs are only available to ‘Major Taxpayers’.

RUSSIA (cont’d)



General On 3 May 2018 the Russian Ministry of Finance published an Order on the procedure for conclusion of bilateral and multilateral APAs. Under the Order, Taxpayers may request APAs with states that have effective DTTs with Russia. Taxpayers have the option of holding a pre-filing meeting with the FTS, and the Order also provides a recommended APA application form and list of required documents, including:

■■ a draft APA;

■■ documents on activities involving controlled transactions and on controlled transactions under an APA;

■■ copies of charter documents;

■■ copy of certificate of registration;

■■ copy of tax registration certificate;

■■ financial performance for the last reporting period;

■■ document confirming payment of State duty; and

■■ other information and documentation as requested by the FTS.

The Order proposes a standard pre-filing, application and monitoring process. Taxpayers may use it as a guide for initiating the APA application process.


The Taxpayer must provide the FTS with a notification on controlled transactions under the APA. The FTS will check the Taxpayer’s compliance with the APA.

Renewal procedure

Applications for the renewal of an APA should be filed six months before the expiry date. APAs may be prolonged for a term not exceeding two years in accordance with the general procedure.

RUSSIA (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Division of International Taxation of the Department of Tax and Customs Policy, Ministry of Finance (‘MOF’) for unilateral APAs; and the Federal Tax Service for bilateral and multilateral APAs, and exchange of information procedures.

Relevant provisions


Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Russia is signatory.


Most of Russia’s DTTs permit Taxpayers to present a case to the MOF within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.



Taxpayers must provide at least the following:

■■ Copies of relevant contracts;

■■ Copies of any relevant correspondence with the Russian tax authorities, as well as copies of correspondence; and

■■ Copies of any correspondence with the relevant foreign jurisdiction(s).


RUSSIA (cont’d)






STATISTICS

APA Since 2012 the authorised body in Russia has received 82 draft APAs and concluded 25 of those on a unilateral basis. Additionally, at the beginning of the 2018 fiscal year, nine APAs have been concluded on an unilateral basis.

MAP Russia had a total of two active MAP applications as of 31 December 2017.

RUSSIA (cont’d)




Albania

Algeria

Argentina

Armenia

Australia

Austria

Azerbaijan

Belarus

Belgium

Botswana

Brazil

Bulgaria

Canada

Chile

China(IV)

Croatia

Cuba

Cyprus

Czech Republic

Denmark

Egypt

Finland

France

Germany

Greece

Hong Kong(IV)

China

Hungary

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Japan

Kazakhstan

Kyrgyzstan

Korea (Democratic People’s Republic of)

Korea (Republic of)

Kuwait

Latvia

Lebanon

Lithuania

Luxembourg

Macedonia

Malaysia

Mali

Malta

Mexico

Moldova

Mongolia

Montenegro

Morocco

Namibia

Netherlands

New Zealand

Norway

Philippines

Poland

Portugal

Qatar

South Africa

Romania

Saudi Arabia

Serbia

Singapore

Slovakia

Slovenia

Spain

Sri Lanka

Sweden

Switzerland

Syria

Tajikistan

Thailand

Turkey

Turkmenistan

Ukraine


United Kingdom

Mexico

United States

Uzbekistan

Venezuela

Vietnam

RUSSIA (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Inland Revenue Authority of Singapore (‘IRAS’)

Relevant provisions

Section 8 and 10 of the Transfer Pricing Guidelines (Fourth edition), published by the IRAS on the 12 January 2017.



Acceptance criteria

The acceptance of a MAP or APA application is at the discretion of the IRAS. Bilateral and multilateral APAs are available to:

■■ Taxpayers that are Singapore tax residents; and

■■ Taxpayers who are not Singapore tax residents but have a branch in Singapore.

Such applications are to be made by the Taxpayers in the jurisdictions in which they are tax residents and with which Singapore has a DTT. Unilateral APAs are available to Taxpayers regardless of whether they are Singapore tax residents.

Taxpayers should only apply for an APA when:

■■ there is a genuine motive to obtain certainty for the avoidance of double taxation;

■■ the request relates to specific current or future transactions that are not hypothetical;

■■ they are certain that the cross-border related party transactions will commence or continue to take place throughout the APA covered period;

■■ the incidence of double taxation is certain or highly probable for the fiscal years to be covered;

■■ the Taxpayer has robust reasons and TP documentation to support the application; and

■■ the Taxpayer has evaluated the suitability of an APA through an in-depth cost benefit analysis of their tax situations.

SINGAPORE


KEY FEATURES


The APA process follows strict timing deadlines, including:

■■ submission of pre-filing materials at least one month prior to the pre-filing meeting;

■■ the pre-filing meeting must take place at least nine months before the first day of the fiscal year the APA is intended to cover; and

■■ the IRAS will indicate whether it is inclined to accept the APA request at least four months before the first day of the APA covered period.

The APA application should be submitted within three months of the IRAS indicating that it will accept an APA application.


Filing fee There is no filing fee for bilateral or multilateral APAs. There is an administrative fee for unilateral APAs where related transactions involve a jurisdiction with which Singapore does not have a DTT.


Rollback years are available for two years immediately prior to the covered period for bilateral and multilateral APAs. Rollback availability is based on the merits of the request and there is no significant difference in the facts and circumstances for the covered period and for the rollback years. Documentation substantiating this may be requested by IRAS. Unilateral APAs will not be extended to prior years.

Collateral issues Administrative or tax issues subject to legal or judicial proceedings that are relevant to and may affect the outcome of the APA should be addressed and resolved during the APA process. The IRAS is unlikely to deviate from determinations made by Singaporean tribunals or courts.

SINGAPORE (cont’d)



Overview Taxpayers should initiate a pre-filing meeting with IRAS either directly or through its tax agent. Pre-filing materials must be submitted to IRAC one month prior to the pre-filing meeting and include:

■■ the Taxpayer’s name, address, tax identification number and contact details;


■■ any relevant foreign tax authorities;

■■ fiscal years intended to be covered under the proposed APA;

■■ a brief description of the transactions involved;

■■ the related parties to the transactions; and

■■ a letter of authorisation (‘LOA’) for the IRAS to discuss with appointed representatives of the Taxpayer on the matters relating to the APA application.

The pre-filing meeting must take place at least nine months before the first day of the fiscal year the APA is intended to cover. The IRAS will indicate whether it is inclined to accept the APA request at least four months before the first day of the APA covered period.







One electronic copy and three hard copies of the APA application should be submitted within three months of the IRAS indicating that it will accept an APA application.

The application must include:

■■ the entities covered;

■■ the transactions covered;

■■ the period covered;

■■ the TP method;

■■ the agreed arm’s length remuneration for the covered transaction;

■■ compensating adjustment rules;


■■ any other documentation as agreed with the IRAS at the pre-filing stage.

The Taxpayer should submit the application simultaneously with the IRAS and any relevant foreign tax authorities.




General Taxpayers should note that the key deadlines for submission of documentation must be strictly observed in order for the APA to cover the fiscal years intended.


Taxpayers must file annual compliance reports to demonstrate compliance with the terms and conditions of the APA together with its income tax returns. There is no fixed prescribed format for filing the report.

Renewal procedure

Taxpayers may request to renew an existing APA following the same process as it did to initiate the existing APA. Any significant changes to the circumstances prevailing when the existing APA was made should be highlighted.



MAP PROGRAM

KEY FEATURES

Competent authority

Inland Revenue Authority of Singapore (‘IRAS’)

Relevant provisions

Section 9 of the Transfer Pricing Guidelines (Fourth edition), published by the IRAS on the 12 January 2017; and the e-Tax Guide, available on the IRAS website.

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Singapore is signatory.


Taxpayers should submit a MAP application to the IRAS within the time limit specified in the MAP article of the relevant DTT.



There is no prescribed application form to be completed; however, any MAP application should be made in via letter in soft copy and hard copy to the CA of the IRAS, and include the following details and documentation:

■■ Taxpayer’s name, address, tax identification number, contact details and main business activities;

■■ letter of authorisation stating the engagement of tax agents or other representatives to act for the taxpayer (where applicable);

■■ the relevant DTT, including the provision(s) of the specific article(s) which the Taxpayer considers is not being correctly applied;

■■ the relevant facts of the case and documentation to support these facts, as well as the taxation years and amount involved;

■■ analysis of the issue(s) involved to support the claim that the provision(s) is not correctly applied, and relevant supporting documentation;





■■ whether the Taxpayer has pursued domestic remedies such as via tax tribunals or courts in the relevant foreign jurisdiction, and a copy of the decision(s);

■■ whether similar issue(s) has been previously dealt with or is currently being considered in an advance ruling, APA, settlement arrangement or similar proceedings or by any tax tribunal or court, and a copy of these rulings or decisions;

■■ how the Taxpayer has reflected the issue(s) in its Singapore income tax return (e.g. income not brought to tax, foreign tax credit claimed); and

■■ a statement confirming that all information and documentation provided in the MAP request is accurate and that the Taxpayer will assist the tax authorities in its resolution of the issue(s) presented in the MAP request by furnishing any other information or documentation required by the IRAS in a timely manner.

Language Documentation should be submitted in English.



Taxpayers may pursue domestic legal proceedings separately from MAP.


STATISTICS

APA There were 59 active APA applications during income year 2015-16 and 16 completed applications. The average completion time for bilateral and multilateral APAs was 24 months. The IRAS has had an APA program since 2003.

MAP Singapore had a total of 21 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 41 months for transfer pricing cases, and 38 months for other cases.



Albania

Australia

Austria

Bahrain

Bangladesh

Barbados(IV)

Belarus(IV)

Belgium

Brunei

Bulgaria

Cambodia(IV)

Canada

China

Cyprus

Czech Republic

Denmark

Ecuador(IV)

Egypt

Estonia

Ethiopia(IV)

Fiji

Finland

France(IV)

Georgia

Germany

Guernsey(IV)

Hungary

India

Indonesia

Ireland

Isle of Man(IV)

Israel

Italy

Japan

Jersey(IV)

Kazakhstan

Korea (Republic of)

Kuwait

Laos(IV)

Latvia

Libya

Liechtenstein(IV)

Lithuania

Malaysia

Malta

Mauritius

Mexico(I), (IV)

Mongolia

Morocco(IV)

Myanmar

Netherlands

New Zealand

Norway

Oman

Pakistan

Panama

Papua New Guinea

Philippines

Poland(IV)

Portugal(VI)

Qatar

Romania

Russia

Rwanda(IV)

San Marino(IV)

Saudi Arabia

Seychelles(IV)

Slovak Republic

Slovenia

South Africa(IV)

Spain(IV)

Sri Lanka(IV)

Sweden

Switzerland(IV)

Taiwan

Thailand(IV)

Turkey

Ukraine


United Kingdom

Uruguay(IV)

Uzbekistan

Vietnam




NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Spanish Tax Agency

Relevant provisions

Article 18(9) of the Corporate Income Tax Law



Acceptance criteria

Both resident and non-resident Taxpayers may submit APA applications with proposals regarding the valuation of future related transactions carried out by individuals and associated entities.

Applications from non-resident individuals and legal entities are required to be or plan to be carrying out business transactions in Spain through either:

■■ a PE located in Spain; or

■■ a resident legal entity.


There is no specific guidance on timing for Taxpayers; however, the Spanish Tax Agency have a statutory six-month period to complete an APA application.

APA term limits There is a four-year maximum term for an APA, calculated from the date the agreement is reached. Additionally, the APA may also be applicable for previous periods, so long as these are not statute-barred and there is not a final assessment in place.



Rollback is available provided there is not a final settlement of the transaction(s).


SPAIN



Overview Taxpayers are required to submit a preliminary application with information including:

■■ identification of the parties;

■■ a brief description of the transaction(s) covered; and

the basic elements of the intended pricing proposal.





The APA application must contain:

■■ an arm’s length pricing proposal, including a description of the TP method and the analysis followed to determine the market value;

■■ a confirmation that the related-parties know and accept the pricing proposal; and

■■ transfer pricing documentation that complies with Spanish regulations, as relevant to the APA.

Language The documentation should be submitted in Spanish. Translations may be requested for non-Spanish language submissions.


SPAIN (cont’d)



General The Spanish Tax Agency follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer is required to report any significant changes in the circumstances on which the APA is based. Taxpayers must annually file together with their tax return a statement describing:

■■ related party transaction(s) carried out during the fiscal year applying the APA;

■■ prices agreed in the related party transaction(s);

■■ description of variations on the economic circumstances, if any;

■■ similar transactions to those described in the APA, prices and description of the differences between them; and

■■ other information as required by the Spanish Tax Agency.

Renewal procedure

An APA may be renewed through application of an extension six months before expiry of the existing APA.

SPAIN (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

The Spanish Tax Agency, for procedures related to transfer pricing and attribution of profits to PEs; and

The General Directorate for Taxation, for all other cases.

Relevant provisions

Regulation on the Mutual Agreement Procedures Concerning Direct Taxation, approved by Royal Decree 1794/2008, of 3 November 2008, and amended by Royal Decree 1558/2012, of 15 November;

Royal Decree 634/2015, of 10 July 2015; and

Royal Decree 1021/2015, of 13 November.

Acceptance criteria

Taxpayers may request MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Spain is signatory. The Spanish regulations also provide that MAP requests may be refused in the following circumstances:

■■ when there is no applicable DTT with an article related to the MAP;

■■ when the application has been submitted outside the terms established in the agreement;

■■ when initiating a MAP is not required as it is a matter of domestic law and not a divergence or discrepancy in the application of a DTT;

■■ when there is evidence that the actions of the Taxpayer were intended to avoid taxes in one of the relevant jurisdictions;

■■ when the request refers to the opening of a new procedure on an issue that has already been subject to another MAP raised previously by the same Taxpayer and on which an agreement between both tax authorities had been reached or on which the Taxpayer had rejected; and

■■ when the request for correction has been answered within the deadline but the responses are not completed.

SPAIN (cont’d)




If requested under a Spanish DTT, Taxpayers must make a MAP request before the deadline stipulated established under the relevant DTT, from the date of the notification which leads or may lead to double taxation. If requested under the EU Arbitration Convention (90/436/EEC), Taxpayers have three years to present a case to the tax authorities.



The MAP request must be made in the form of a letter addressed to the Spanish Tax Agency or the General Directorate for Taxation, and contain the following information/documentation:

■■ full name, address and tax identification number of the Taxpayer presenting the request, and the other parties involved in the transactions under consideration;

■■ identification of the relevant foreign tax authority;

■■ the article of the DTT that the Taxpayer considers has not been applied correctly and the interpretation that the Taxpayer gives to that article;

■■ identification of the affected tax or settlement periods;

■■ detailed description of the facts and relevant circumstances related to the case, including the amounts in question, as well as the data corresponding to the relationships, situations or structure of operations between the people affected;

■■ identification of administrative or judicial appeals lodged by the applicant or by the other parties involved, as well as any resolution that would have fallen on the same question;

■■ indication of whether the Taxpayer has previously filed a request before any of the tax authorities involved on the same or a similar issue;

■■ declaration stating whether the request includes any question that may be considered to be part of an APA or of some similar procedure;

SPAIN (cont’d)




■■ commitment on the part of the Taxpayer requesting the MAP to readily respond to all requests made by the Spanish Tax Agency in order to negotiate the MAP;

■■ date and signature of the person requesting the MAP, or their representative;

■■ relevant transfer pricing documentation;

■■ copies of the settlement, its notification and the reports issued by the tax authorities;

■■ copies of the resolutions issued by the relevant foreign jurisdictions that affect the procedure; and

■■ power of attorney, in cases where the Taxpayer acts through an external representative.




In cases where the Taxpayer initiates a MAP and domestic proceedings simultaneously, the latter will be suspended until the MAP negotiations are concluded.

Arbitration As Spain is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 37 APA application requests in 2015 and 16 completed applications. The Spanish Tax Agency has had an APA program since 1995.

MAP Spain had a total of 287 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 43 months for transfer pricing cases, and 37 months for other cases.

SPAIN (cont’d)


Albania

Algeria

Andorra(IV)

Argentina(IV)

Armenia

Australia

Austria

Azerbaijan(V)

Bahrein(V)

Barbados

Belarus(II)(V)

Belgium

Bolivia

Bosnia

Brazil

Bulgaria

Canada

Cape Verde(V)

Chile

China

Colombia

Costa Rica

Croatia

Cuba

Cyprus(IV)

Czech Republic

Denmark

Dominican Republic(IV)

East Timor

Ecuador

Egypt

El Salvador

Estonia

Finland

France

Georgia

Germany

Greece

Hong Kong

Hungary

Iceland

India

Indonesia

Iran

Ireland

Israel

Italy

Jamaica

Japan

Kazakhstan

Kuwait

Kyrgyzstan(II)

Latvia

Lithuania

Luxemburg

Macedonia

Malaysia

Malta

Mexico

Moldova

Montenegro(V)

Morocco

Namibia(V)

Netherlands

New Zealand

Nigeria(IV)

Norway

Oman(IV)

Pakistan

Panama

Peru(V)

Philippines

Poland

Portugal(VI)

Qatar(IV)

Romania

Russia

Saudi Arabia



SPAIN (cont’d)



SPAIN (cont’d)

Senegal(IV)

Serbia

Singapore

Slovak Republic

Slovenia

South Africa

Southern Korea

Sweden

Switzerland(I)

Syria(V)

Tajikistan(II)

Thailand

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan(II)

Ukraine(II)(V)


United Kingdom(I)

United States

Uruguay

Uzbekistan(IV)

Venezuela

Vietnam

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Swedish Tax Agency (‘STA’)

Relevant provisions

Law (2009:1289) on Advance Pricing Agreements Regarding International Transactions;

Regulation (2009:1295) on Advance Pricing Agreements Regarding International Transactions;

Bill (2009/10:17) Advance Pricing Agreements Regarding International Transactions; and

Guidance available on the STA website.



Acceptance criteria

An APA application will only be accepted if the transaction(s) to be covered is considered by the STA to be of a sufficiently complex nature and the arm’s length principle is applicable to the Taxpayer’s circumstances. The STA will make an assessment of the eligibility of the Taxpayer on a case by case basis.

The transactions covered by the application must be assessed separately from other transactions not covered by the application,

The Taxpayer must provide the information required for an APA to be concluded. The TP method chosen in the application, after any adjustments, must be deemed to be able to provide a price that corresponds to what two independent parties would have applied. APAs may only be granted if a mutual agreement on pricing of international transactions has been concluded with the foreign jurisdiction state listed in the APA application with which Sweden is a DTT partner.

SWEDEN




There is no specific guidance on key timing requests or deadlines. In practice, the timeline for the APA application process is negotiated with the STA during the pre-filing stage.

APA term limits The APA is valid for a predetermined period of three to five years.

Filing fee The filing fee for a new APA is SEK 150,000 (approx. USD 17,400).


There is no specific guidance on rollbacks; however, they may be available on a case by case basis at the discretion of the STA.

Collateral issues Administrative or tax issues that are relevant to and may affect the outcome of the APA should be addressed and resolved at the pre-filing stage with the STA.


Overview A pre-filing meeting will be conducted with the applicant and the STA unless special reasons imply that such a meeting should not be held. However, in practice, it is likely that the STA will be open to allowing pre-filing meetings. If the request for a pre-filing meeting is accepted, the meeting will cover the conditions of a proposed APA, the timeline of the APA application process, and the information and documentation required to be included in the application.





An application for an APA should be sent in four copies and contains the following:

■■ the name, billing address, any organisation numbers, personal number or any equivalent registration numbers, or equivalent foreign numbers for the relevant parties;

■■ information regarding which tax years the application concerns;

■■ information regarding which jurisdictions will be involved;

SWEDEN (cont’d)




■■ information regarding any foreign APA that cover the entities in the applications and if this APA concerns similar transactions as the Swedish APA application;

■■ a description of the parties to the APA and their respective organisation and business;

■■ information regarding the nature and scale of the transactions;

■■ a functional analysis;

■■ a comparative analysis;

■■ a description of the chosen TP method;

■■ justification for the chosen TP method and its feasibility; and

■■ information regarding the assumptions and conclusions that form the basis of the chosen TP method.




General The STA follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must notify the STA without undue delay if any circumstances arise that the assumptions and conditions in the APA are no longer valid. Details regarding what should be included in the notification are settled on a case by case basis.

Renewal procedure

There is no specific regulation for renewal of an APA. It is at the discretion of the STA to adapt its procedure to take into consideration an application for an APA that is already in existence. The filing fee for a renewal application is SEK 100,000 (approx. USD 11,600).

SWEDEN (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

Swedish Tax Agency (‘STA’)

Relevant provisions


Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Sweden is signatory.


Taxpayers have three years to present a case to the STA under the EU Arbitration Convention (90/436/EEC).



The MAP request should contain the following information:

■■ name, address, social security number or organisation number of the applicant;

■■ the country in which the matter applies;

■■ reference to which article of the DTT was incorrectly applied and a statement of why the applicant considers that the agreement was incorrectly applied;

■■ name, address and, if possible, identification number of any foreign affiliated company in association with the applicant company as well as a statement of the relationship between the two companies;

■■ the tax year or years of the application;

■■ name of tax office or similar that has taken the adjustment abroad;

■■ description of all relevant facts in the case and a statement of the grounds for taxation in the other country;

■■ statement of amounts and how these have been calculated;

■■ for transfer pricing cases, relevant transfer pricing documentation;

SWEDEN (cont’d)




■■ copies of relevant documents sent to or received from relevant foreign tax authorities;

■■ whether the question has been appealed to a court in Sweden or abroad and copies of such judgments;

■■ indication of any APA or other agreement that is relevant to the matter;

■■ possible power of attorney to represent the applicant;

■■ applicant’s possible proposals for resolving the matter; and

■■ other relevant information or documents.

Language Documentation may be submitted in English or Swedish.




Arbitration As Sweden is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 July 2019 on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body.

STATISTICS

APA There were 12 active APA application requests in 2017 and ten completed applications. The average completion time in 2015 was 36 months for bilateral and multilateral APAs. The STA has had an APA program since 2010.

MAP Sweden had a total of 179 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 34 months for transfer pricing cases, and 31 months for other cases.

SWEDEN (cont’d)


Albania

Andorra

Anguilla

Antigua & Barbuda(IV)

Argentina

Armenia(I)(IV)

Aruba

Australia

Austria

Azerbaijan(IV)

Bahamas

Bahrain(IV)

Bangladesh(IV)

Barbados

Belarus

Belgium

Belize(IV)

Bermuda

Bolivia

Bosnia-Hercegovina

Botswana

Brazil


Brunei

Bulgaria

Canada

Cayman Islands

Chile

China

Cook Islands

Costa Rica(IV)

Croatia

Cyprus

Czech Republic

Denmark

Dominica

Egypt

Estonia

Faeroe Islands

Finland

France

Gambia

Georgia(IV)

Germany(VIII)

Gibraltar

Greece

Greenland

Grenada(IV)

Guernsey

Hong Kong

Hungary

Iceland

India

Indonesia

Iran

Iraq

Ireland

Isle of Man

Israel

Italy

Jamaica

Japan(I), (IV)

Jersey

Kazakhstan

Kenya

Korea (Republic of)

Kosovo

Kuwait

Latvia

Lebanon

Liberia(IV)

Liechtenstein(IV)

Lithuania

Luxembourg

Macao(IV)

Macedonia

Malaysia

Malta



SWEDEN (cont’d)



Marshall Islands(IV)

Mauritius(IV)

Mexico

Monaco

Montenegro

Montserrat(IV)

Namibia

Netherland Antilles

Netherlands

New Zealand

Nigeria(IV)

Norway

Oman

Pakistan

Panama(IV)

Philippines

Poland

Portugal(VI)

Qatar(IV)

Romania

Russia

Saint Kitts & Nevis

Saint Lucia(IV)

Samoa(IV)

San Marino

Saudi Arabia(IV)

Serbia

Seychelles(IV)

Singapore

Slovakia

Slovenia

South Africa

Spain

Sri Lanka

St Vincent & The Grenadines

Switzerland(IV)

Taipei(III)

Tanzania

Thailand

Trinidad & Tobago

Tunisia

Turkey

Turks & Caicos Islands

Ukraine


United Kingdom(I), (IV)

United States

Uruguay

Vanuatu

Venezuela

Vietnam

Zambia

Zimbabwe

SWEDEN (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

State Secretariat for International Financial Matters (‘SIF’), and cantonal tax authorities (for unilateral APAs) (‘Tax authorities’)

Relevant provisions

There are no specific APA provisions under Swiss domestic law. The legal foundations for the APA process are the MAP provisions contained in the relevant Swiss DTTs.



Acceptance criteria



An application for an APA can be submitted at any time, including after an audit.

APA term limits There is a five-year maximum term for an APA. Longer or shorter periods may be covered depending on the complexities and critical assumptions involved. Bilateral and multilateral APAs may be extended through negotiation with the relevant foreign CA(s).









SWITZERLAND




For bilateral and multilateral APAs, the ‘Request for Mutual Agreement Procedures (MAP)/Advance Pricing Agreements (APA) regarding Transfer Pricing’ application form available on the SIF website should be submitted to the SIF and include the following information:

■■ the Swiss and foreign entities and/or PE(s) involved;

■■ financial years intended to be covered;

■■ type(s) of transaction intended to be covered;

■■ foreign CA(s) with which SIF should negotiate;

■■ TP method and demonstration of application; and

■■ collateral issues.







Renewal procedure


SWITZERLAND (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

State Secretariat for International Financial Matters (‘SIF’)

Relevant provisions


Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Switzerland is signatory.


Most of Switzerland’s DTTs permit Taxpayers to present a case to the SIF within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. It is prudent to consult the relevant DTT to determine the time limit that applies and to ensure that the deadline for presenting a case is not missed.



The following information should be contained in the MAP request:

■■ name, address, and tax identification number of the Taxpayer concerned, and relevant related parties;

■■ if the Taxpayer has an authorised representative, a valid power of attorney;

■■ the Swiss Tax authorities concerned, including the contact person if known;

■■ the other relevant jurisdiction(s) concerned;





■■ description of the facts and circumstances of the specific case, including the tax amounts in question in Swiss francs and in the foreign currency, details of any relationships between the Taxpayer making the request and the other persons directly affected by the case, as well as the annual financial statements for the tax periods concerned in the case of companies;

■■ if the MAP request was also submitted to another authority based on another international treaty with a dispute resolution mechanism, the date of that request, the name of the person and the authority to which it was submitted, as well as a copy of that other request and all enclosures to be included if not identical to the other request;

■■ if available, detailed information on any legal remedies sought in Switzerland or abroad;

■■ if applicable, copies of any advance ruling, APA, or a court ruling;

■■ any other pertinent details or documents for resolving the case; and

■■ a declaration confirming that all information and all documents in the MAP request are accurate and that the Taxpayer will assist the SIF by diligently supplying any other pieces of information or any other document required by the authority.






STATISTICS


MAP Switzerland had a total of 349 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 31 months for transfer pricing cases, and 19 months for other cases.



AlbaniaAlgeriaAnguillaAntiguaArgentina(VI)

ArmeniaAustralia(I), (IV)

AustriaAzerbaijanBangladeshBarbadosBelarusBelgiumBelizeBritish Virgin IslandsBulgariaCanada(I)

ChileChina(IV)

ColombiaCroatiaCyprus(VI)

Czech RepublicDenmark(I)

DominicaEcuadorEgyptEstoniaFaroe IslandsFinlandFranceGambiaGeorgiaGermany(I)

GhanaGreeceGrenadaHong Kong(I), (IV)

Hungary(IV)

IcelandIndiaIndonesiaIranIrelandIsrael

ItalyIvory CoastJamaicaJapanKazakhstanKorea (Republic of)KuwaitKyrgyzstanLatviaLiechtenstein(VI)

LithuaniaLuxembourg(I)

MacedoniaMalawiMalaysiaMaltaMexicoMoldovaMongoliaMontserratMoroccoNetherlands(I)

New ZealandNorwayOman(VI)

PakistanPeruPhilippinesPoland(I)

Portugal(VI)

QatarRomaniaRussiaSaudi ArabiaSerbia and MontenegroSingapore(IV)

Slovak RepublicSloveniaSouth AfricaSpain(I)

Sri LankaSt Kitts and NevisSt Lucia

St Vincent and the GrenadinesSweden(IV)

Taiwan(III)

TajikistanThailandTrinidad and TobagoTunisiaTurkeyTurkmenistanUkraineUnited Arab EmiratesUnited Kingdom(I)

United StatesUruguayUzbekistan VenezuelaVietnamZambia




NOTESI denotes treaties with MAP arbitration provisions.II denotes treaties with the USSR that remain applicable until a separate tax treaty is concluded.III denotes treaties between the countries’ representative office in Taipei and the Taipei Economic and

Cultural Office in the relevant country.IV denotes treaties that became effective within the last five years.V denotes treaties that are awaiting ratification.VI denotes MAP provisions identical to para 3, art 25 of the OECD Model Convention with respect to

Taxes on Income and on Capital.VII arbitration is to be conducted under the statutes of the ECJ.VIII arbitration is to be conducted under the statutes of the ICJ.


APA PROGRAM

KEY FEATURES

Competent authority

The Revenue Department (‘the Revenue’)

Relevant provisions

Guidance on the APA process, available on the Revenue’s website.


Bilateral APAs are available.

Acceptance criteria



Taxpayers must submit a written document of intent for a pre-filing meeting at least six months prior to the last day of the first accounting period that the APA aims to become effective. Furthermore, APA applications must be submitted to the Revenue within the last day of the first accounting period intended to be covered by the APA.




There is no rollback availability.


THAILAND



Overview Taxpayers must submit a written document of intent for a pre-filing meeting to the Director General of the Revenue at least six months prior to the last day of the first accounting period that the proposed APA is to become effective. The objective of the pre-filing meeting is to:

■■ discuss the reason for the APA application;

■■ submit pre-filing documentation;

■■ discuss the documents required to be included in the APA application;

■■ discuss the filing date of the APA application; and

■■ discuss ways to minimise the time taken to process the APA application.

Pre-filing documents must be submitted at least 15 days prior to the pre-filing meeting. Pre-filing documents include:

■■ name and address of Taxpayer seeking the APA;

■■ accounting period of the entity and the relevant transactions;

■■ structure and relationship of the related parties;

■■ details of business revenue account showing all transactions;

■■ detailed analysis of assets and risks of all transactions;

■■ detailed analysis of the structure of industries and their market share; and

■■ TP method chosen for the APA and explanation of the selection.



THAILAND (cont’d)




Taxpayers must submit a written document of intent (a form to be published by the Revenue) and required documents to the Revenue within the last day of the first accounting period intended to be covered by the APA. Required documents include:

■■ the name and address of the Taxpayer seeking the APA;

■■ the accounting period intended to be covered and the relevant transactions;

■■ the organisational structure and relationship of the related entities;

■■ details of business revenue accounts showing all transactions;

■■ a detailed analysis of assets and risks of all transactions;

■■ the TP method chosen for the APA and explanation of the selection;

■■ a benchmarking study of comparables;

■■ the critical assumptions;

■■ the history and status of any audits; and

■■ any other relevant documents requested by the Revenue.

Five hard copies of each document and one electronic copy must be submitted to the Revenue.

Language The documentation must be submitted in both Thai and English.



General While the Revenue follows a standard pre-filing, application and monitoring process, it should be noted that documentation is required to be submitted in in both Thai and English.


There is no specific guidance on post-agreement filing procedures. The timeframe for annual report submission will be provided in a written notice from the Revenue at the conclusion of APA.

Renewal procedure


THAILAND (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

The Revenue Department (‘the Revenue’)

Relevant provisions


Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Thailand is signatory. It should be noted, however, that indirect taxes are not covered under Thailand’s DTTs.


Most of Thailand’s DTTs permit Taxpayers to present a case to the Revenue within three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.



Taxpayers are required to submit a letter requesting commencement of MAP. The letter should explain the facts and circumstances of the case, and the reasons why the Taxpayer regards the tax treatment as being not in accordance with the provisions of the applicable DTT.




It is possible to request MAP while the Taxpayer is pursuing domestic litigation against the Revenue. However, Taxpayers must pay the assessed tax if they have received an assessment notice, regardless of whether or not the Taxpayer requests MAP.


STATISTICS

APA Statistics on APAs have not been made publicly available. The Revenue has had an APA program since 2010.

MAP Statistics on MAP requests have not been made publicly available.

THAILAND (cont’d)


Armenia

Australia

Austria

Bahrain

Bangladesh

Belarus

Belgium

Bulgaria

Cambodia(IV)

Canada

Chile

China

Cyprus

Czech Republic

Denmark

Estonia(IV)

Finland

France

Germany

Hong Kong

Hungary

India(IV)

Indonesia

Ireland(IV)

Israel

Italy

Japan

Korea (Republic of)

Kuwait

Laos

Luxembourg

Malaysia

Mauritius

Myanmar

Nepal

Netherlands

New Zealand

Norway

Oman

Pakistan

Philippines

Poland

Romania

Russia

Seychelles

Singapore(IV)

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Taipei(III), (IV)

Tajikistan(IV)

Turkey

Ukraine


United Kingdom

United States

Uzbekistan

Vietnam


The following treaties include MAP provisions which are the basis for bilateral APA negotiations:

THAILAND (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

State Fiscal Service of Ukraine (‘SFSU’)

Relevant provisions

Paragraph 39.6 of the Tax Code of Ukraine; and

Order of the Cabinet of Ministers of Ukraine dated July 17, 2015, No. 504 ‘On conclusion of advance pricing agreements in respect of controlled transactions for transfer pricing purposes’ (‘APA Procedure’) (as amended).



Acceptance criteria

Only large Taxpayers can apply for the APA. ‘Large Taxpayers’ are defined as Ukrainian entities or PEs of non-resident Taxpayers that meet one of the following criteria:

■■ amount of income for four consecutive tax quarters exceeds EUR 50m (approx. USD 59m); or

■■ amount of tax payments to state budget for the same period exceeds EUR 1m (approx. USD 1.9m) (provided customs duties included in this amount do not exceed EUR 500,000 (approx. USD 590,000)).


There are no deadlines for the submission of early engagement or APA requests. The SFSU has 60 calendar days to respond to early engagement requests. There are no specific timeframes for completion of the APA procedure after submission of an APA application to the SFSU.




Rollback is available for prior years.

Collateral issues Administrative or tax issues which are relevant for an APA must be addressed with the SFSU during the pre-filing stage and are subject to mutual agreement between the parties.

UKRAINE



Overview Taxpayers may request a preliminary feasibility assessment from SFSU (‘early engagement’), during which they can clarify the feasibility of an APA and ensure proper preparation of documents and materials required for the APA application. In order to apply for early engagement, Taxpayers should send a request to SFSU containing the following information:

■■ purpose of the request;

■■ Taxpayer’s name;

■■ Taxpayer’s code in the Unified State Register of Enterprises and Organisations of Ukraine;

■■ Taxpayer’s representative that will take part in early engagement, including their position, full name, phone number, email address, and documents confirming the authority to represent the Taxpayer;

■■ substance and actual facts of the controlled transaction(s) covered under the proposed APA;

■■ business activities of the parties to the controlled transaction(s) and jurisdiction(s) of tax residency of such parties;

■■ information on the related parties, including an organisational structure of the group; and

■■ other information which the Taxpayer considers relevant.

During early engagement, the SFSU will arrange a meeting with the Taxpayer. Within 60 calendar days after submission of the request the SFSU will notify the Taxpayer in writing of the results of the SFSU’s preliminary feasibility assessment.


Anonymous pre-filling is not available.

UKRAINE (cont’d)




An APA application must be accompanied with the following documents:

■■ transfer pricing documentation as required by the Tax Code of Ukraine;

■■ copies of the constituent documents of the Taxpayer;

■■ accounting records and financial statements of the Taxpayer for the last three reporting periods (years);

■■ description of any current tax disputes which relate to the APA application;

■■ documentation that confirms tax residency of non-resident party;

■■ description of any implications from DTTs between Ukraine and the country of tax residency of the party on subject of the APA;

■■ results of analysis of the possible impact of the APA on tax obligations of parties to the controlled transaction(s);

■■ copies of any APA application(s) that the related party has filed in any other jurisdiction(s);

■■ copy of the document which confirms the right of the Taxpayer’s representative(s) to take part in the APA application process on its behalf; and

■■ proposals regarding procedure, terms, and a list of documents which will confirm the Taxpayer’s compliance with the APA terms.

Taxpayers have the right to provide, and SFSU has the right to request, any other documents which may be required for the APA procedure.

UKRAINE (cont’d)



Language The APA application, supporting documentation and materials should be prepared in Ukrainian. Any documents which are prepared in foreign languages must be translated into Ukrainian. In the case of bilateral and multilateral APA applications, all documentation provided must also be translated into English.

SME provisions APAs are only available to entities considered Large Taxpayers (as defined above).


General The SFSU follows a standard pre-filing, application and monitoring process. An APA comes into effect on the date agreed between the SFSU and the Taxpayer, or otherwise on 1 January of the year following that in which the APA was signed.


Taxpayers that have entered into an APA must submit an annual report on performance under APA, submission deadline, form and content of which is established by respective APA. Conclusion of APA does not exempt the Taxpayer from the requirement to submit report on controlled transactions on an annual basis under the general procedure.

Renewal procedure

In practice, an APA may be renewed; however, there are no specific regulations as to renewal procedure.

UKRAINE (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

State Fiscal Service of Ukraine (‘SFSU’)

Relevant provisions

Chapter 10, section 2 of the Tax Code of Ukraine; and provisions in Ukrainian DTTs.

Acceptance criteria



Most of Ukraine’s DTTs provide a three-year limitation period for filing MAP applications; however, some DTTs:

■■ do not contain a limitation period at all (i.e. with Azerbaijan, Algeria, United Kingdom, United States, and Sweden);

■■ provide for a two-year limitation period (i.e. with Italy, Lebanon, Canada, Indonesia, and Iran); or

■■ refer to domestic limitation period (i.e. with Turkey and Brazil).








Arbitration Ukraine has only one DTT with an arbitration clause (with the Netherlands); however, this is yet to be applied.

STATISTICS

APA As of May 2018 no APA has been concluded; however, there is one APA request pending.

MAP As of May 2018 there are no official statistics on MAP application in Ukraine.

UKRAINE (cont’d)




Algeria

Armenia

Austria

Azerbaijan

Belarus

Belgium

Brazil

Bulgaria

Canada

China

Croatia

Cyprus(IV)

Czech Republic

Denmark

Egypt

Estonia

Finland

France

Georgia

Germany

Greece

Hungary

Iceland

India

Indonesia

Iran

Ireland(IV)

Israel

Italy

Japan(II)

Jordan

Kazakhstan

Korea (Republic of)

Kuwait

Kyrgyzstan

Latvia

Lebanon

Libya

Lithuania

Luxembourg(IV)

Macedonia

Malta(IV)

Malaysia(II)

Mexico

Moldova

Mongolia

Montenegro

Morocco

Netherlands(I)

Norway

Pakistan

Poland

Portugal

Republic of Cuba

Romania

Russia

Saudi Arabia

Serbia

Singapore

Slovakia

Slovenia

South Africa

Spain(II)

Sweden

Switzerland

Syria

Tajikistan

Thailand

Turkey

Turkmenistan


United Kingdom

United States

Uzbekistan

Vietnam

UKRAINE (cont’d)

NOTES










APA PROGRAM

KEY FEATURES

Competent authority

HM Revenue and Customs (‘HMRC’)

Relevant provisions

Sections 218-230 of the Taxation (International and Other Provisions) Act 2010 (‘TIOPA’); and

HMRC Statement of Practice 2 (2010) (‘SP2/10’); and HMRC Guidance INTM422000 et seq.



Acceptance criteria

APA applications are more likely to be successful if:

■■ the transfer pricing issues are complex, and uncertainty exists as to how the arm’s length standard should be applied;

■■ HMRC consider negotiating the APA a good use of its resources; or


APAs must be bilateral rather than unilateral except where the other party to the transaction(s) is resident in a jurisdiction with which the United Kingdom has no DTT, the treaty partner has no APA process, or HMRC considers there is little to be gained by seeking a bilateral agreement.


There is no specific guidance. Negotiations between the Taxpayer and HMRC during the pre-filing stage will determine the date from which the APA will commence.




Rollback is available on a case by case basis after HMRC’s consideration of the relevant facts and circumstances. In bilateral cases, the decision will also depend on the ability or willingness of the relevant foreign tax authorities.

UNITED KINGDOM



Collateral issues The nature of any current transfer pricing enquiries, HMRC claims, and any other relevant issues, including the potential of the United Kingdom’s diverted profits tax to apply to the covered transactions should be raised with HMRC at the pre-filing stage.


Overview At least one ‘expression of interest meeting’ with HMRC is recommended to discuss:

■■ the nature of the transfer pricing issues intended to be covered by an APA;

■■ details of the tax residence of the parties involved and importance to the wider business of the transactions covered; and

■■ a description of the proposed TP method.



UNITED KINGDOM (cont’d)




The application should set out:

■■ the applicant’s understanding of the effect of the relevant legislation and DTT(s) in relation to the relevant transfer pricing issues;

■■ the areas where clarification of that effect are required; and

■■ a proposal for clarifying the effect of the legislation in accordance with the applicant’s understanding. All proposals need to be supported by:

– identification of the parties and accounts for previous three years

– description of the transfer pricing issues proposed, analysis of the functions and risks, and actual and projected financial data of the parties

– description of the global group structure, and major categories of transaction flows of the relevant parties

– description of records to be maintained in support of proposed TP method and information demonstrating the Taxpayer’s tax returns will conform to the APA’s terms

– description of any current tax enquiries or HMRC claims relevant to issues covered by the proposed APA

– chargeable periods to be covered by the APA

– identification of assumptions made in developing the proposed TP method critical to the reliability of its application under the arm’s length standard

– analysis of the diverted profits tax position in respect of the covered transactions and any transactions directly connected to them

– any current or expired rulings issued by a foreign tax authority

– where appropriate, a request for HMRC assistance in reaching a bilateral or multilateral APA





SME provisions Access to APAs are limited by the TIOPA which exempts certain SMEs from United Kingdom’s transfer pricing legislation.


General HMRC follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must provide an ‘Annual Report’ accompanying its business tax return for the duration of the APA. Details as to what should be included in the Annual Report are provided on a case by case basis.

Renewal procedure

Applications for the renewal of APAs are required to be lodged six months before expiry.



MAP PROGRAM

KEY FEATURES

Competent authority

HM Revenue and Customs (‘HMRC’)

Relevant provisions

Section 124 of the TIOPA;

HMRC Statement of Practice 1 (2018) (‘SP1/18’); and

HMRC Guidance INTM 423000 et seq.

Acceptance criteria

A MAP request can be made when a Taxpayer considers that the actions of one or both contracting states’ tax authorities results, or will result, in taxation not in accordance with the relevant DTT. Whereas provisions in older UK DTTs require that Taxpayers approach the tax authority of their country of residence to request treaty relief, the SP1/18 makes clear that, under new UK DTTs, Taxpayers can approach the tax authority of either contracting state with a request to initiate MAP.





Taxpayers must submit a MAP request to HMRC to initiate the MAP process. While there is no set form for submission, HMRC require sufficient information and documentation to enable a full assessment of the request, including, for requests under the relevant DTT:

■■ the year(s) concerned;

■■ the tax convention article(s) that the Taxpayer asserts is not being correctly applied, and the Taxpayer’s interpretation of the application of the article;

■■ the full names and addresses of the parties to which the MAP relates;

■■ the UK party’s HMRC office and reference number;

■■ for requests submitted by an agent, signed authority for the agent to act;

■■ HMRC Customer Compliance Manager or HMRC other contact;

■■ where the request is in respect of a UK adjustment, the international specialist or other HMRC officer responsible for the enquiry that lead to the adjustment;

■■ UK tax computations for all years concerned. In the case of a UK adjustment computations before and after the adjustment;

■■ for overseas adjustments, details of and legal or administrative process that affects the MAP. Has the overseas state denied or suspended MAP as a result of a particular domestic legal or administrative process?;

■■ contact details for the relevant foreign tax authority, if the claim has already been made to the other country;

■■ details of previous requests, if the request relates to an issue that is the same as an issue that has been subject to an earlier request;





■■ exchange rates used;

■■ for transfer pricing cases, the name, address and, if possible, the Taxpayer identification number of any related foreign taxpayer involved;

■■ the relationship, situation, or structure of the transactions, issues, or related parties involved (advising of any changes in these matters that occur after the request has been filed would be helpful);

■■ a summary of the facts and an analysis of the issues for which tax authority assistance is requested, including any specific issues raised by the tax administrations affecting the Taxpayer and the related amounts (in both currencies and supported by calculations, if applicable);

■■ for transfer pricing cases, documentation as described in domestic legislation of the Taxpayer’s state of residence if available (where documentation is inordinately voluminous, a description of the documentation prepared in connection with the transactions which are the subject of the MAP request may be acceptable);

■■ a schedule of the time limitations in each jurisdiction (domestic as well as tax convention time limits) in respect of the years for which relief is sought (in cases of multiple Taxpayers, a schedule for each);

■■ a statement indicating whether the Taxpayer has filed a notice of objection, notice of appeal, refund claim, or comparable document in either of the relevant jurisdictions;

■■ where the request for tax authority assistance involves issues that are currently or were previously considered by the tax authorities of either contracting state as part of an APA ruling, or similar proceedings, a statement to that effect;





■■ any other facts that the Taxpayer may consider relevant;

■■ a copy of any settlement or agreement reached with the other jurisdiction which may affect the MAP process;

■■ the Taxpayer’s views on any possible bases on which to resolve the issues; and

■■ a statement to the effect that the request is also made under the EU Arbitration Convention where applicable.

The request should generally be signed by the Taxpayer, or by an authorised person on behalf of the Taxpayer, confirming the accuracy and completeness of the facts and information presented in the request. Alternatively, an accompanying document, stating as much, may be provided within a reasonable period of time after the submission. In addition to the above, the information below will help HMRC form an initial view of the strength of the case for granting relief in instances where the request is in respect of an overseas adjustment. The list is not exhaustive and in more complex cases HMRC will make additional requests for information to consider the request:

■■ the relationship of the claimant(s) to other relevant parties;

■■ in transfer pricing or profit attribution claims, reports or analyses provided by the Taxpayer to support their filed position;

■■ a narrative setting out the matter under dispute, a brief outline of the progress of the dispute, and the outcome; and

■■ in transfer pricing or profit attribution requests, the results of benchmark studies used to support the filing position and the alternative position taken by the other state.

The following information and documentation is required for requests under the EU Arbitration Convention:

■■ identification (such as name, address, tax identification number) of the enterprise of the Member State that presents its request and of the other parties to the relevant transactions;





■■ details of the relevant facts and circumstances of the case (including details of the relations between the enterprise and the other parties to the relevant transactions);

■■ identification of the tax periods concerned;

■■ copies of the tax assessment notices, tax audit report or equivalent leading to the alleged double taxation;

■■ details of any appeals and litigation procedures initiated by the enterprise or the other parties to the relevant transactions and any court decisions concerning the case;

■■ an explanation by the enterprise of why it considers that the principles set out in article 4 of the EU Arbitration Convention have not been observed;

■■ an undertaking that the enterprise shall respond as completely and quickly as possible to all reasonable and appropriate requests made by a tax authority and have documentation at the disposal of the tax authorities; and

■■ any specific additional information requested by the tax authority within two months upon receipt of the Taxpayer’s request.

Taxpayer’s may also file ‘Protective MAP requests’. A Protective MAP request is a unique feature of the HMRC MAP process, the purpose of which is to protect Taxpayers against missing the prescribed time limits. The minimum information required in a presentation for a protective MAP request is:

■■ details of the year(s) concerned;

■■ a brief description of the action giving rise, or expected to give rise, to taxation not in accordance with the relevant DTT; and

■■ the full names and addresses of the parties to which the MAP relates, including the UK Taxpayer’s HMRC office and reference number.

A protective MAP request will not trigger the start date of a MAP case.






SP1/18 provides that the UK Taxpayer’s ability to request MAP is not affected by domestic administrative or statutory dispute resolution processes. HMRC may grant access to MAP, even in circumstances where the Taxpayer and HMRC enter into an audit settlement. However, it must be considered how entering into statutory or administrative remedies with other tax authorities might affect a Taxpayer’s accessibility to MAP.

Arbitration As the United Kingdom is a member of the European Union, Taxpayers may initiate the arbitration procedure under the Tax Dispute Resolution Mechanism Directive on 10 October 2017. The Directive is applicable to matters submitted after 1 Jul 2019, on issues related to the tax year starting on or after 1 January 2018. The EU Arbitration Convention (90/436/EEC) also imposes a binding obligation on EU member states to eliminate double taxation under DTTs including, if necessary, by reference to the opinion of an independent advisory body. Access to these arbitration procedures is subject to the United Kingdom’s exit from the European Union.

STATISTICS

APA There were 67 APA application requests in 2015 and 37 completed applications. The average completion time was 21 months. HMRC has had an APA program since 1999.

MAP The United Kingdom had a total of 314 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 28 months for transfer pricing cases, and 56 months for other cases.





Albania(I), (IV)

Algeria(I), (IV)

Argentina

Armenia(I), (IV)

Australia

Austria

Azerbaijan

Bahrain(I), (IV)

Bangladesh

Barbados(IV)

Belarus

Belgium

Bolivia

Bosnia-Herzegovina

Botswana


Bulgaria(IV)

Canada(I)

Cayman Islands

Chile

China(IV)

Croatia(IV)

Cyprus

Czech Republic

Denmark

Egypt

Estonia

Ethiopia(IV)

Falkland Islands

Faroe Islands

Fiji

Finland

France(I)

Gambia

Georgia

Germany(I)

Ghana

Guernsey

Guyana

Hong Kong

Hungary

Iceland(I), (IV)

India

Indonesia

Ireland

Isle of Man

Israel

Italy

Ivory Coast

Japan(I), (IV)

Jordan

Kazakhstan

Kenya

Korea (Republic of)

Kosovo(I), (IV)

Kuwait

Latvia

Lesotho

Libya

Liechtenstein(I), (IV)

Lithuania

Luxembourg

Macedonia

Malaysia

Malta

Mauritius

Mexico

Moldova

Mongolia

Monsterrat

Montenegro

Morocco

Netherlands(I)

New Zealand

Nigeria

Norway(I), (IV)

Oman

Pakistan



Panama(IV)

Papua New Guinea

Philippines

Poland

Portugal

Qatar(I)

Romania

Russia

Saudi Arabia

Senegal(IV)

Serbia

Singapore

Slovak Republic

Slovenia

South Africa

Spain(I), (IV)

Sri Lanka

Sudan

Swaziland

Sweden(I), (IV)

Switzerland(I)

Taiwan

Tajikistan(I), (IV)

Thailand

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan(IV)

Uganda

Ukraine


United States

Uruguay(I), (IV)

Uzbekistan

Venezuela

Vietnam

Zambia(IV)

Zimbabwe


NOTES










APA PROGRAM

KEY FEATURES

Competent authority

Advance Pricing and Mutual Agreement office (‘APMA’), under the Large Business and International (‘LB&I’) Division of the Internal Revenue Service (‘IRS’)

Relevant provisions

Revenue Procedure 2015-41 (‘Rev Proc 2015-41’); and

Guidance available on the APMA website.



Acceptance criteria



A Taxpayer is required to file an APA request within the time prescribed for filing its federal income tax return for the first proposed APA year. For bilateral and multilateral APAs, requests must be filed no later than 60 days after the corresponding request has been filed with the foreign tax authorities.

APA term limits Taxpayers are encouraged to propose terms covering at least five prospective years.

Filing fee General fee USD 60,000

Renewal fee USD 35,000

Small cases fee USD 30,000


An APA may cover one or more rollback years. Taxpayers should include a rollback request as part of its APA request. APMA may consider implementing a rollback even in the absence of a request. APMA will not agree to cover a closed filed year with a rollback of a unilateral APA request except in unusual circumstances.

Collateral issues Any open back years of the Taxpayer under examination by the IRS must be identified in a pre-filing memorandum. A member of the IRS examination team involved in the Taxpayer’s case will be involved in any APA negotiations with APMA.

UNITED STATES



Overview APMA may require the Taxpayer to meet in a pre-filing conference and submit a pre-filing memorandum. Taxpayers may also request a pre-filing conference or choose to submit a pre-filing memorandum. Pre-filing memoranda are recommended for APA requests that may present novel or complex substantive or procedural issues, and requests for which APMA could reasonably have concerns regarding interrelated matters. Mandatory pre-filing memoranda must include:

■■ whether a pre-filing conference is sought and issues the Taxpayer wishes to discuss and three possible dates for the conference at least two weeks after submission of the memorandum;

■■ covered issue diagrams;

■■ name and contact information of the Taxpayer, and authorisation for the Taxpayer’s representatives and points of contact to inspect or receive confidential tax information; and

■■ identification of all open back years and which, if any, are under investigation by the IRS.

Both optional and mandatory pre-filing memoranda must be accompanied by an ‘APMA Pre-file conference request’ form, available on the IRS website.

APMA will notify the Taxpayer whether it will accept or decline a request to hold a pre-filing conference, and may require a conference even where one has not been requested.



UNITED STATES (cont’d)




APA requests must contain a request letter, as well as the following 22 ‘exhibits’:

1. Contents of exhibits – provide a table or similar comprehensive list of the exhibits submitted, indicating the form in which they have been submitted;

2. Authorisation forms – for representatives of the Taxpayer (e.g., an enrolled agent, lawyer or certified public accountant), and/or for those authorised to inspect or receive confidential information about the Taxpayer;

3. Protective claim – for bilateral or multilateral APAs, a statement affirming whether the request is to serve as a protective claim;

4. Waiver of ex parte communication – if the APA involves rollback years, a waiver of the Taxpayer’s right to be present during communications between the IRS Appeals and the APMA team;

5. Consent to disclosure – for disclosure of an APA request to any applicable foreign tax authorities;

6. Consents regarding period of limitations – any executed consents to extend the period of limitations for assessment of tax;

7. ‘Penalties of perjury’ declaration – a declaration signed by the Taxpayer that the APA request and supporting documentation contains all relevant facts, and that such facts are true, correct and complete;

8. User fee receipt – obtained after paying required APA user fee;

9. Documents submitted to foreign competent authorities – a list of all documentation or written submissions provided to a foreign tax authorities in connection with the APA request;

10. Pre-filing submissions – any pre-filing memoranda submitted in connection with the APA request;





11. Covered issue diagrams – including the controlled group’s legal structure, tax structure, business units, the value chain of the proposed covered group, and organisational charts;

12. APAs – the most recent APA, if any, that the Taxpayer has entered into with the IRS or foreign tax authorities;

13. Selection process – a report on results of applying criteria for selecting comparable agreements or independent comparable companies or other market data, including tables or matrix showing reasons for rejecting agreements, independent companies or other market data;

14. Information on selected comparables – a detailed discussion of the contractual terms of selected comparable agreements, as applicable;

15. Proposed draft APA – submitted in a form similar to APMA’s current model APA (available on the APMA website or on request) and a ‘redline’ version of the same showing the differencas between the model APA and the proposed draft APA;

16. Application of APA template – for APA requests that involve an application of the comparable profits method or the transactional net margin method, provide income statement data for the previous five taxable years and balance sheet data for the previous six taxable years for the relevant members of the proposed covered group, using the template provided by the IRS;

17. Federal income tax filings – Forms 1120, 5471, 5472, 8858 for each of the three most recent filed years of the Taxpayer;

18. Financial statements – full income statements, balance sheets, cash flow statements for the most recent three back years, specifying accounting standard used;





19. Section 6662 documentation – documentation prepared in consideration of the transfer pricing penalty under IRC s 6662(e) for each relevant member of the proposed covered group for each of the most recent three back years;

20. Regulatory filings – Securities and Exchange Commission filing by the controlled group for each of the most recent three back years;

21. APA annual reports – for renewal requests only; and

22. Intercompany agreements – copies of intercompany contracts or agreements between the Taxpayer and other members of the covered group within the scope of the covered issues.


SME provisions To be eligible for a small cases APA:

■■ sales revenues must be less than USD 500m in each of most recent three tax years;

■■ the aggregate value of the proposed covered issue(s) cannot be expected to exceed USD 50m in any given year for the duration of the APA;

■■ the aggregate value of any transfer of rights in, or rights to use, intangibles cannot be expected to exceed USD 10m in any given year for the duration of the APA; and

■■ no proposed covered issue can involve intangible property arising from, or otherwise relate to, and intangible development arrangement.

Taxpayers that are eligible for the small cases APA may submit a complete APA request together with the fee, or may contact APMA to discuss filing an abbreviated APA request.




General APMA follows a standard pre-filing, application and monitoring process. There are no unique procedural aspects.


The Taxpayer must provide an annual report for the duration of the APA, demonstrating compliance with the APA terms and conditions, and any adjustments. The report must be filed with APMA by the later of (i) the 15th day of the 12th month following the close of the APA year, or (ii) 90 days after the effective date of the APA. APMA may require the following documentation in an annual report:

■■ a statement regarding any material differences between business operations during the APA year and the description of business operations contained in the APA request;

■■ a statement concerning any material changes to the Taxpayer’s accounting methods and classifications, and methods of estimation from those described in the APA request;

■■ any changes to the Taxpayer notice information;

■■ a description of any failure to meet critical assumptions;

■■ a statement identifying whether or not any material information submitted while the APA request was pending is discovered to be false, incorrect or incomplete;

■■ the amount, reason for, and financial analysis of any compensating adjustments for the APA year;

■■ the amounts, description, reason for, and financial analysis of any book-tax difference relevant to the TP method for the APA year;

■■ a statement regarding whether the Taxpayer intends to request a renewal, modify or cancel the APA;

■■ financial statements, analysis and accounting details to demonstrate compliance with the TP method;

■■ an organisational chart;

■■ a copy of the APA and any amendments; and

■■ a penalty of perjury statement.




Renewal procedure

Taxpayers may seek renewal of an APA, and the renewal process generally follows the same process as APA requests unless the IRS permits the submission of an abbreviated APA request. An abbreviated APA request may be filed if the Taxpayer can show that the applicable law, facts and circumstances, economic conditions, proposed covered issues and methods and other relevant factors are reasonably expected to be substantially the same as those in the proposed renewal APA years.



MAP PROGRAM

KEY FEATURES

Competent authority

Advance Pricing and Mutual Agreement office (‘APMA’), under the Large Business and International (‘LB&I’) Division of the Internal Revenue Service (‘IRS’)

Relevant provisions

Revenue Procedure 2015-40 (‘Rev Proc 2015-40’)

Acceptance criteria

Taxpayers may request a MAP (a ‘Competent Authority Request’) if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which the United States is signatory. In addition, the Taxpayer must be resident either in the United States or the other relevant contracting state; they must meet the prescribed time limits; and satisfy the prescribed conditions for a Competent Authority Request. Taxpayers must submit a pre-filing memorandum prior to filing a Competent Authority Request if the issues will involve a taxpayer-initiated position. The pre-filing memorandum must identify the Taxpayer, explain the factual and legal basis of the Taxpayer-initiated position, and describe any administrative, legal, or other procedural steps undertaken in the relevant foreign country, and any communications with the relevant foreign country regarding the position. For a Competent Authority Request that does not involve a Taxpayer-initiated position, there is no mandatory pre-filing procedure, although the IRS recommends submissions of a pre-filing memorandum and pre-filing conference in such circumstances. The pre-filing memorandum must propose at least three possible dates for a pre-filing conference, each at least two weeks after the date that the pre-filing memorandum is submitted.


Most of the United States’ DTTs permit Taxpayers to present a case to the IRS within a prescribed period from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.





Taxpayers must include the following in a formal Competent Authority Request:

1. Identifying information – Provide the following information for the Taxpayer filing the Competent Authority Request:

■■ name;

■■ address and phone number;

■■ countries of residence for purposes of the treaty;

■■ US taxpayer identification number or foreign taxpayer identification number; and

■■ names and countries of incorporation or residence of all members of the controlled group whose taxable incomes would be affected by a competent authority resolution being reached in the case.

2. Authorisations and Contacts – Provide names and contact information for the following:

■■ Power of Attorney;

■■ all individuals authorised to inspect or receive confidential tax information about the Taxpayer in connection with the Competent Authority Request; and

■■ the individual(s) who will serve as the Taxpayer’s point(s) of contact for the APMA office.

3. IRS Office – Provide the following information:

■■ for issues arising from United States-initiated adjustments, identify the IRS office that made the adjustment and provide the name of and contact information for the taxpayer’s IRS Examination team manager; and

■■ for issues not arising from United States-initiated adjustments, identify the IRS office having examination jurisdiction over the Taxpayer or United States members of the controlled group and provide the name of and contact information for the Taxpayer’s IRS Examination team manager if the Taxpayer is under examination when the Competent Authority Request is filed.





4. Treaty(ies) – Identify the DTT(s) and articles under which the request is being filed.

5. Summary of competent authority issues – Provide a summary of the competent authority issues for which assistance is being requested.

6. Years and amounts – Provide the taxable years and amounts at issue, presented in both United States Dollars and foreign currency, together with the exchange rate(s) that was used for currency conversion during the applicable taxable years.

7. Taxpayer proceedings – Provide:

■■ a summary of relevant United States and foreign judicial and administrative proceedings involving the Taxpayer or other members of the controlled group, that are relevant to the competent authority issues for which assistance is being requested (including all information related to notifications provided to the relevant treaty country(ies)); and

■■ a summary of all other United States judicial proceedings that concern the Taxpayer’s federal tax liability for any taxable period involved in the competent authority request.

8. Other proceedings – To the extent known, provide a summary of any relevant foreign judicial and public administrative proceedings not involving the Taxpayer or members of the controlled group but concerning an issue similar to the competent authority issue for which the competent authority request is being filed.

9. Statutes of limitations – Provide the expiration dates of applicable statutes of limitations in both the United States and the treaty country(ies) for the taxable years covered by the Competent Authority Request.

10. Competent authority issues – Provide a thorough, informative explanation of the competent authority issues for which assistance is requested.





11. Prior or current U.S. competent authority assistance – State whether or not each competent authority issue set forth in the Competent Authority Request is the same or similar to an issue considered in a prior or current competent authority or APA request covering the same or other taxable years.

12. Pre-filing information – Indicate whether a pre-filing memorandum was filed; and whether a pre-filing conference was held.

13. Coordination with other proceedings – Provide information on whether the Taxpayer entered into a previous agreement with IRS; and for any competent authority issue for which assistance is being requested that has been under the jurisdiction of IRS Appeals pursuant to a protest, the date of any opening conference with IRS Appeals and evidence showing that the taxpayer has properly severed the competent authority issue from the issues in its protest that will remain under the jurisdiction of IRS Appeals; and whether a simultaneous appeals procedure (‘SAP’) review is sought.

14. Accelerated Competent Authority Procedure (‘ACAP’) years – Provide the following information:

■■ whether the taxpayer requests ACAP and, if so, the ACAP years proposed to be covered;

■■ whether the taxpayer does not seek to apply the competent authority resolution to one or more ACAP years and its reasons for not requesting ACAP (such as the transactions at issue not having occurred in subsequent taxable years); and

■■ whether the taxpayer has filed a bilateral or multilateral APA request pursuant to Rev. Proc. 2015-41 that proposes to cover one or more issues covered by the Competent Authority Request and, if so, whether it included a rollback request for ACAP years in its APA request.





15. Ancillary issues – List the ancillary issues (if any) the Taxpayer requests be addressed in the competent authority resolution, e.g., competent authority repatriation

16. Attachments not included – List any required Competent Authority Request attachments that the Taxpayer has not included in its Competent Authority Request, together with explanations as to why such items are not included.

17. Prescribed attachments – A Competent Authority Request must also include certain prescribed attachments after the request letter. A list of these can be found under Section 2 of the Appendix to ‘Rev Proc 2015-40’.






Competent Authority Requests can be made while domestic disputes remain live. If the case is with IRS Appeals, the Taxpayer can transfer jurisdiction to the APMA office at any time, or can request simultaneous consideration by Appeals and the APMA office.

Arbitration The United States has included an arbitration clause in a number of its MAP provisions under DTTs.

STATISTICS

APA There were 386 pending APA applications and 116 executed applications as of 31 December 2017. The average completion time was 46.9 months for bilateral APAs and 40.4 months for unilateral APAs. The IRS has had an APA program since 1991.

MAP The United States had a total of 967 active MAP applications as of 31 December 2016. The average time needed to close MAP cases is 32 months for both transfer pricing and other cases.





Armenia

Australia

Austria

Azerbaijan

Bangladesh

Barbados

Belarus

Belgium(I)

Bulgaria

Canada(I)

China

Cyprus

Czech Republic

Denmark

Egypt

Estonia

Finland

France(I)

Georgia

Germany(I)

Hungary

Iceland

India

Indonesia

Ireland(I)

Israel

Italy(I)

Jamaica

Japan

Kazakhstan(I)

Korea (Republic of)

Kyrgyzstan

Latvia

Lithuania

Luxembourg

Malta

Mexico(I)

Moldova

Morocco

Netherlands

New Zealand

Norway

Philippines

Poland

Portugal(VI)

Romania

Russia

Slovak Republic

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Tajikistan

Thailand

Trinidad

Tunisia

Turkey

Turkmenistan

Ukraine

United Kingdom

Uzbekistan

Venezuela


NOTES










APA PROGRAM

KEY FEATURES

Competent authority

General Department of Taxation, The Minister of Finance or his authorised representative (‘Tax authorities’)

Relevant provisions

Circular No. 201/2013/TT-BTC



Acceptance criteria



There is no specific guidance on timing requests or deadlines. The Taxpayer will negotiate a timeline for the APA application process during the pre-filling stage.




Rollback is not available to prior years.


VIETNAM



Overview A consultation before the formal filing of an APA application is required with the Tax authorities to determine the suitability of an APA. Taxpayers must include the following with its request for consultation:

■■ ‘Form 1/APA-TV’;

■■ the name and address of the Taxpayer, and names and addresses of parties to the related transaction(s);

■■ the type of APA sought;

■■ any relevant foreign jurisdiction(s) that will be party to the negotiations;

■■ a description of the related transaction(s) to be covered and not covered (if any) by the APA and an explanation for their inclusion, or exclusion;

■■ the value of the related transaction(s);

■■ the desired duration of the APA;

■■ an analysis of the functions, assets, and risks during the business of the Taxpayer and related parties to the transaction(s) covered;

■■ the proposed TP method including comparables, benchmarking, calculation methods, arm’s length range, and adjustments of material differences (if any);


■■ general information on enterprises, such as the business scope and size, the Taxpayer’s controlled transactions, provision and exchange of information about and on operation of business groups (e.g., industry, capital, structure, business size) and its associated parties relevant to the controlled transaction(s) to be covered by the APA;

VIETNAM (cont’d)



Overview (cont’d) ■■ organisational structure;

■■ a summary of any tax audits;

■■ disclosure of whether any APAs have been concluded with any other foreign jurisdiction(s) or similar covered APA transactions;

■■ positions of any relevant foreign tax authorities;

■■ a proposed timeline for the APA application process, and forms of communication; and

■■ any other information or documentation relevant to the APA application or as requested by the Tax authorities.

The Tax authorities will notify the Taxpayer within 30 working days from the last pre-filing meeting the outcome of the pre-filing consultation.



VIETNAM (cont’d)




Taxpayers must submit a formal APA application to the Tax authorities within 120 days of receiving written approval after the pre-filing consultation (a 30-day extension is possible in certain circumstances).

The APA application must include the following:

■■ ‘Form 2/APA-CT’;

■■ information about the Taxpayer and parties to the related transaction(s) covered by the APA;

■■ the name and address of the Taxpayer, and names and addresses of parties to the related transaction(s), including any foreign tax authorities;

■■ tax codes of the Taxpayer and addresses of business locations;

■■ information about the primary lines of business of the Taxpayer and related parties;

■■ type of related transaction(s), scope and the covered period intended under the APA;

■■ the related transaction(s) covered and not covered (if any) under the APA and an explanation for their inclusion, or exclusion;

■■ value of the related transaction(s);

■■ the type of APA sought;

■■ general information about the Taxpayer and organisation including a brief history, business model, and organisational structure;

■■ a description of the group’s value chain and the position of the related transaction(s) covered by the APA in that value chain;

■■ a detailed description of the transaction flow related to the transaction(s) covered by the APA and similar related transactions made in other jurisdictions (if any);

VIETNAM (cont’d)




■■ the capital structure, associated relationship (including but not limited to direct or indirect investments, loans, and the ratio of investment among the partners);

■■ characteristics of business activities and main business areas of associated parties;

■■ a description of the business strategy of the corporation and any impact on the Taxpayer;

■■ a description of the business strategy intended to be employed by the Taxpayer during the covered period, including a business plan for the period of five years following the APA application, and performance over the previous three years;

■■ an analysis of the Taxpayer’s industry and tendencies that might affect the business of the Taxpayer;

■■ detailed functions, risks and assets analysis of the Taxpayer and any associated party to the APA including allocation of resources and facilities if shared by associated parties (for assets including IP or intangibles, it is necessary to state clearly the ownership, usage, any protection status, IP registration date, and the value of intangibles in price settings of goods/services covered by the APA);

■■ financial statements including any audits, annual reports and enterprise income statements from the three years prior to filing the APA application;

■■ proposed TP method, the source of data and information used for comparable analysis and, calculation method of product prices, gross profitable ratios, and profit level indicators related to the controlled transaction(s) covered by the APA;

VIETNAM (cont’d)





■■ information on the settlement of corporate income tax in any relevant foreign jurisdiction(s) and the relationship between the domestic laws and relevant DTT provisions;

■■ copies of any existing APAs with foreign tax authorities for similar covered APA transaction(s);

■■ copies of any contracts or other legal agreements between the Taxpayer and related parties that affect the transaction(s) covered by the APA, including agreement on ownership, rights of usage, sale, distribution of services, and development studies; and

■■ any other information or documentation relevant to the APA application or as requested by the Tax authorities.

Three copies of the APA application must be submitted to the Tax authorities. The Tax authorities shall notify the Taxpayer of the outcome within 90 days of receiving the formal APA application. The tax authorities may extend the evaluation stage by no more than 60 days and notify the Taxpayer in writing if such an extension is required. The Tax authorities may request to carry out a site-visit of the Taxpayer’s premises during the evaluation of the APA application.

Language The documentation for unilateral APAs should be submitted in Vietnamese. For bilateral and multilateral APA applications, documentation should be submitted in Vietnamese with English translations.


VIETNAM (cont’d)





Taxpayers are required to submit an APA annual report together with their annually final statement of corporate income tax. Taxpayers with an APA will be subject to an APA compliance audit, but will be exempted from a transfer pricing audit.

Renewal procedure

Taxpayers may extend an existing APA for up to five additional years. An application for extension must be submitted at least six months before expiry of the existing APA.

VIETNAM (cont’d)


MAP PROGRAM

KEY FEATURES

Competent authority

General Department of Taxation, The Minister of Finance or the Minister’s authorised representative (‘Tax authorities’)

Relevant provisions

Circular 205/2013/TT-BTC

Acceptance criteria

Taxpayers may request a MAP if taxation has or is likely to occur that is not in accordance with the provisions of a DTT to which Vietnam is signatory.


Most of Vietnam’s DTTs permit Taxpayers to present a case to the Tax authorities within two or three years from the first notification to the Taxpayer of the actions giving rise to taxation not in accordance with the DTT. However, time limits may vary, and the relevant DTT should be consulted for the applicable time limit.







Taxpayers may initiate domestic proceedings; however, a MAP request will not be accepted if the domestic proceedings have commenced, or a decision has been made in relation to the matter by a domestic court.


STATISTICS

APA Statistics on APAs are not publicly available. The Tax authorities have had an APA program since 2014.

MAP Statistics on MAP cases are not publicly available.

VIETNAM (cont’d)


Australia

Belgium

Bulgaria

Canada(IV)

China

Czech Republic

Denmark

Estonia(IV)

France

Finland

Germany

Hong Kong

Hungary

Iceland

India

Indonesia

Iran(IV)

Ireland

Italy

Japan

Kazakhstan(IV)

Korea (Republic of)

Luxembourg

Malta(IV)

Mongolia

Netherlands

New Zealand(IV)

Norway

Philippines

Panama(IV)

Poland

Portugal(IV)

Romania

Russia

San Marino(IV)

Singapore

Spain

Sweden

Switzerland

Thailand

Turkey(IV)

Ukraine

United Kingdom

Uruguay



VIETNAM (cont’d)

NOTES










DLA PIPER CONTACTS BY COUNTRY

Joel CooperPartner, Co-Head International Transfer Pricing T +44 207 796 6929 M +44 773 829 5470 [email protected]

Randall Fox Partner, Co-Head of International Transfer PricingT +44 207 796 6928 M +44 773 8295 935 [email protected]

AUSTRALIA

Jock McCormack Partner, Tax Location Head T +61 2 9286 8253 [email protected]

AUSTRIA

Norbert Roller Of Counsel T +43 1 531 78 1930 [email protected]

BELGIUM

Gregory Komlosi Lead Lawyer T +32 02 500 1514 [email protected]

CANADA

Max Weder Counsel T +1 604 643 6370 [email protected]

CHINA

Windson Li Partner T +86 10 8520 0609 [email protected]

Daniel Chan Partner, Tax Location Head T +852 2103 0821 [email protected]

Jessica Tien Principal EconomistT +1 650 833 [email protected]

COLOMBIA

Felipe Ospina Acosta Partner, Head of Tax T +57 1 317 4720 115 [email protected]

DENMARK

Artur Bugsgang Partner, Tax Location Head T +45 33 34 00 06 [email protected]


GERMANY

Norbert Roller (Austria based)Of Counsel T +43 1 531 78 1930 [email protected]

HONG KONG

Daniel ChanPartner, Tax Location HeadT +852 2103 [email protected]

Anderson LamPartnerT +852 2103 [email protected]

ITALY

Federico Pacelli Partner T +39 02 8061 88 502 [email protected]

INDIA

Rachit Agarwal (UK based)Transfer Pricing Director T +44 20 7153 7105 [email protected]

FRANCE

Fanny Combourieu Partner, Tax Location Head Head T +33 1 40 152 523 [email protected]

HUNGARY

Peter KiralyAssociateT +36 30 720 [email protected]

FINLAND

Jaakko Klemettilä Senior Counsel, Tax Location Head T +358 9 4176 0435 [email protected]

LUXEMBOURG

Geoffrey Scardoni Partner, Tax Location Head T +352 26 29 04 43 34 [email protected]

MEXICO

Abelardo Acosta Law Clerk, Mexico Tax Desk (San Diego) T +1 858 677 1440 [email protected]

JAPAN

Makiko Kawamura Partner, Tax Location Head T +81 3 4550 [email protected]

NETHERLANDS

Jian-Cheng Ku Tax Adviser T +31 20 541 9911 [email protected]


PORTUGAL

António Moura Portugal Partner, Tax Location Head T +351 21 358 36 28 [email protected]

ROMANIA

Tudor Nedelea Partner, Tax Location Head T +40 372 155 815 [email protected]

Reka Orban (UK based)Transfer Pricing Director T +44 207 796 6133 [email protected]

RUSSIA

Ruslan Vasutin Partner, Co-Tax Location Head T +7 812 448 7200 [email protected]

SPAIN

Carlos Rodriguez Partner, Tax Location Head T +34 91 788 7369 [email protected]

SWEDEN

Erik Björkeson Partner, Tax Location Head T +46 8 701 78 89 [email protected]

POLAND

Bartosz MatusikPartnerT +48 22 540 74 66 [email protected]

PERU

Dr Francisco Botto Partner T +1 511 616 [email protected]

NEW ZEALAND

Lynette Smith Special Counsel T +64 9 300 3812 [email protected]

UKRAINE

Illya Sverdlov Partner, Tax Location Head T +380 44 490 9575 [email protected]

THAILAND

Sirathorn “B.J.” Dechsakulthorn (US based)Principal Economist T +1 212 335 4862 [email protected]


UNITED STATES

Randall Fox (UK based)Partner, Co-Head of International Transfer PricingT +44 207 796 6928 [email protected]

Michael PattonPartnerT +1 310 595 [email protected]

UNITED KINGDOM

Randall Fox Partner, Co-Head of International Transfer PricingT +44 207 796 6928 [email protected]

Joel CooperPartner, Co-Head of InternationalTransfer PricingT +44 207 796 [email protected]

www.dlapiper.com

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This publication is intended as a general overview and discussion of the subjects dealt with, and does not create a lawyer-client relationship. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper will accept no responsibility for any actions taken or not taken on the basis of this publication. This may qualify as “Lawyer Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

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