The IRS Advance Pricing and Mutual Agreement (APMA) program today announced a new template for taxpayers to use in requesting an advance pricing agreement (APA), pursuant to Rev. Proc. 2015-41.
According to an item posted on the APMA webpage (updated 11 May 2018), the new APA template will facilitate the submission and review of APAs. Taxpayers with pending APA requests are instructed to contact their assigned APMA team leader(s) about whether to use this template in their cases.
The new APA template and related instructions reflect changes that were made in response to comments received about draft versions issued by the IRS in September 2017. The new APA template allows some editing by taxpayers “in appropriate cases.”
Today’s release also states that “…to avoid confusion, the revised template repeats in section 4 of Appendix A the explanation of the sense in which ‘Tested Party’ is used.” Also, the revised APA template reflects that when an APA covers the pricing of transactions between related entities, the covered issue is to be described as the pricing for the transaction—rather than simply as the transaction—and the description of the two covered issues in the example (section 3 of Appendix A) is modified to reflect this standard.
The APMA has requested comments concerning the following:
APMA removed proposed section 7 of Appendix A, Effect of Certain Adjustments by Tax Authorities and Resulting Competent Authority Proceedings. This section addressed whether a covered method should be re-applied to take into account certain adjustments between an APA-covered entity and a non-APA-covered entity, and any resulting competent authority resolution, that would affect the testing of financial results under the covered method. APMA believes that this question needs further study. Comments are invited on the frequency with which this question might arise, the need for provisions to address this question, and what provisions or choice of provisions (including those in the removed section of the proposed template) might be appropriate.
<p>© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.</p> <p>KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.</p>
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.