Advance Pricing Agreement Vs Mutual Agreement Procedure

Companies are empowered to apply for the mutual agreement procedure in order to eliminate or avoid double taxation, including close transactions, when such transactions are or are subject to transfer pricing taxation in Japan or in countries where other parties are located (procedures of mutual agreement on the basis of transfer pricing regulation). The Pre-Price Agreement (APA) is a advance notice that gives companies legal certainty regarding their future transactions between two related companies. The Mutual Agreement Procedure (MAP), which is independent of internal remedies, aims to resolve situations of double taxation or situations in which taxation does not comply with a bilateral tax treaty. A pre-price agreement (APA) is a prior agreement between a tax payer and a tax authority on an appropriate transfer pricing method (TPM) for a number of transactions involved during a specified period[1] (“covered transactions”). In this case, Japanese companies are required to ask the Japanese tax authorities for the procedure of the mutual agreement, while related foreign parties are required to do so with the competent authorities of the countries where they are headquartered. By supporting the app and mutual agreement process, we offer our customers the help they need, for example.B. Pre-investigation with tax authorities, preparation and filing of applications, and screening after applications have been accepted. Using BDO International`s fifth largest accounting network, we support bilateral APA in collaboration with member offices. The pre-price agreement (APA) with regard to transfer prices refers to a prior agreement with the tax authorities regarding the method of calculating the price of the length of an arm and specific information relating to foreign-related transactions. The appendix begins with the definition of the different types of APA and describes the objectives of the APA process.

The ability to participate in an APA MAP is considered with respect to contractual issues and other factors such as the audit status of the subject. Issues relating to multilateral GPAs (i.e., where there is more than one bilateral agreement) are also addressed. The central point of the annex deals in detail with the whole MAP-APA procedure, starting with the meetings before the presentation, on the presentation of a proposal, its evaluation by the tax authorities, the discussion and conclusion of the mutual agreement, the implementation of this mutual agreement and, finally, the follow-up of the agreement and a possible extension. While the Schedule focuses on the direction of tax authorities, it takes the opportunity to discuss how the taxpayer can best contribute to this process.