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Advance Transfer Pricing Agreement

Global Med-Biz Creator

Advance Transfer Pricing Agreement

Advance Pricing Agreements (APAs) is a cooperative approach to transfer pricing compliance. They result in considerable time and cost savings for both tax authorities and multinational companies compared to conflicting audits. ASAs promote taxpayers` compliance with the rules in advance and the early resolution of potential disputes. Under German law, an advance pricing agreement (APA) is the combination of a prior agreement between countries on transfer pricing between internationally related companies and a pre-award based on it. When concluding APAs, participating countries shall define the transfer pricing method to be applied between undertakings or related parties for a specified period. This is an administrative procedure based on applications.