Advance Pricing Agreement | KPMG | BE

Advance Pricing Agreement

Advance Pricing Agreement

Today’s global business environment is leading to increased scrutiny of multinationals’ transfer pricing policies.

Today’s global business environment is leading to increased scrutiny of multinationals’

Today’s global business environment is leading to increased scrutiny of multinationals’ transfer pricing policies. Tax authorities are concerned with not only how a company develops and applies its transfer pricing policies but also how related entities in their jurisdictions may be affected by the decisions of tax authorities in other jurisdictions. The result is an increase in transfer pricing controversies, transfer pricing legislation, and enforcement efforts. 

How KPMG can help

Fortunately, there are alternatives to costly and time-consuming transfer pricing audit controversies — alternatives that may prove quite beneficial to your company. Specifically, by negotiating an advance pricing agreement (APA), companies can agree on their transfer prices for future years with tax authorities and, where permitted by local tax authorities, for certain prior years. An APA offers significant advantages to multinationals by helping to reduce uncertainty, avoid disruptive audits (thereby lowering related audit compliance costs), and mitigate the risk of double taxation.

The cost in pursuing an APA lies in the necessary disclosure of detailed information to the tax authorities. Hence, your transfer pricing activities may be closely scrutinized. However, the potential benefits are convincing — avoidance of double taxation, certainty in your transfer pricing methods and outcomes, and the possibility of resolving past audit disputes.

KPMG’s GTPS professionals have extensive experience, among others, in 

  • Negotiating APAs – We can assess the risk of a tax authority challenge to your transfer prices and advise whether an APA is the right approach for you;
  • Dealing with CA claims – We can advise you on when such claims should be made, thus helping you achieve a tax-neutral position.

Please visit our APA webpage to have further information on APAs as well as local tax authorities’ points of view.

Why KPMG?

KPMG’s GTPS process for negotiating multilateral APAs draws on seasoned professionals throughout our global practice, including former tax authority officers. Our highly experienced economists can advise on arguments that are intellectually robust and economically sound.

 

 

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