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Friday, February 15, 2013

Corporate Law

An advance pricing contract (APA) is an ahead of time agreement between a valuepayer and a taxing authority on an appropriate transfer pricing methodology (TPM) for some station of transactions at issue over a stubborn period of time[1] (called Covered minutes).

Most APAs involve US taxpayers and the US Internal Revenue Service (IRS), but APAs ar also made outside the United States.

Bilateral and nine-sided APAs
APAs are generally bi- or eleven-sidedâ€"i.e., they also complicate agreements between the taxpayer and one or more strange tax administrations under the authority of the coarse agreement procedure (MAP) undertake in income tax treaties. The taxpayer benefits from such agreements since it is assured that income associated with Covered Transactions is not subject to double taxation by the IRS and the germane(predicate) foreign tax authorities. It is IRS policy to encourage taxpayers to seek bilaterally symmetrical or multilateral APAs where competent authority provisions exist.

unilateral APAs
Its possible, however, that a taxpayer may negotiate a unilateral APA involving only the taxpayer and the IRS. In this case, the two parties negotiate an appropriate TPM for U.S. tax purposes only.

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Should the taxpayer be involved in a dispute with a foreign tax administration regarding the Covered Transactions, the taxpayer may seek hiatus by requesting that the U.S. Competent Authority initiate a mutual agreement proceeding. This assumes, of course, that there is an applicable income tax treaty in force with the foreign country.

The APA Program
Each APA is handled by an APA team. One of the APA Programs designated team leaders is responsible for assembling the team, and it will generally make up of an economist, an international examiner, LMSB field counsel, andâ€"in a bi- or multilateral caseâ€"a U.S. Competent Authority analyst tasked with principal discussions with treaty partners. Other team members may include an LMSB global Technical Advisor, LMSB exam personnel, or an...If you want to get a full essay, order it on our website: Ordercustompaper.com



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