Subjects who are parties to the APA must submit an annual report certifying that they are complying with the terms of the contract. The content of the report is based on the concrete facts and circumstances of the subject and constitutes an agreed clause of the APA. This will allow taxpayers to achieve cost savings in compliance with the rules. As an indication, the content may be items such as: The Pre-Price Agreement (APA) is a tax notice that gives companies legal certainty for their future intragroup transactions. However, it is possible that a subject may be able to negotiate a unilateral APA involving only the taxpayer and the IRS. In this case, both parties negotiate an appropriate TPM only for U.S. tax purposes. If the taxpayer is involved in a dispute with a foreign tax authority over the registered transactions, he can apply for a discharge by asking the competent US authority to initiate a procedure of mutual agreement. This, of course, implies the entry into force of an applicable foreign income tax agreement. Here are the models of applicants` declarations that the applicant must submit to the authorities after the signing of the pre-price agreement. In its application, the applicant determines the content of the APA.
The application must define the scope of both time and substance. In addition, it is worth mentioning the other countries with which a pre-agreement on transfer pricing is to be concluded. If an applicant requests a multilateral APA (with more than two participating states), the APA consists of several bilateral APAs. (h) Examples for which prior agreements may be particularly important are: upon receipt of the application, BZSt verifies that all conditions (including the applicant`s authorization not to contest the fees) for the execution of an APP procedure are met. An APP procedure is only implemented if the application is admissible and justified. Companies that wish to avoid the threat of double economic taxation in advance can apply for an APA. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. Applications to open an APA can therefore be filed directly with the BZSt. AAAs find their legal basis – as a matter of sense – in double taxation conventions (DBAs), in the respective articles on mutual agreement procedures.