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Advance Pricing Agreement Uk

The main advantage of a company in obtaining an APA is that it is confident that HMRC (if the terms of the APA are met) accepts the treatment of the company`s transfer pricing issues for the duration of the agreement. Bilateral and multilateral APAs are more useful in this regard, as they offer similar assurances with respect to the tax administration of the other jurisdiction, minimizing the risk of double taxation. The company should propose in the application a deadline for the APP. As a general rule, this period is three to five years (a longer period being considered only in exceptional cases), depending on the reasonably assumed period that transfer pricing methods will remain appropriate. 17. APAs are not rejected solely because of the magnitude of transactions that lead to thought pricing problems, as HMRC recognizes that complex transfer pricing problems can arise for small businesses and large multinationals. However, under Section 166 TIOPA 2010, many small and medium-sized enterprises are excluded from UK transfer pricing legislation, so there can only be limited opportunities in which the APP procedure is suitable for small businesses. 35. In the event of a request for a bilateral APA, HMRC expects the company to continue to provide relevant information to the relevant administrations and in turn keep the contractor informed of the progress of its review of the APP application, will endeavour as soon as possible with the contractor to address key issues that will arise and keep the company informed of the progress of the bilateral process. While a bilateral agreement with a contractor is a process between governments, HMRC is generally willing to participate in joint meetings involving businesses and other jurisdictions to assist in the research and evaluation of important substantive issues. 27.

APA must cover in advance periods during which a return has already taken place at the time of application. In cases where returns are made later in the APA process for this APA period, HMRC may be willing to consider extending the APA period. Whether this extension is appropriate would depend on the particular facts and circumstances of this application and the views of the parties involved in the process. 37. A „simple vanilla“ agreement model is attached to Schedule 2 as an appendix to this statement. As a general rule, the person responsible for signing the agreement on behalf of the company would be the person responsible for signing a tax return, subject to the person entitled, within the multinational, to compel the group to meet the requirements of the APA. So you use advance pricing agreements to solve transfer pricing issues. In the most recent case of the Royal Bank of Canada against HM Revenue – Customs [2020] UKFTT 0267 (TC), the First Tier Tribunal examined whether UK corporate tax could be levied on payments made under a sales and sale contract (SPA) to the Canadian-based company…



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