International - Who can apply for an Advance Pricing Agreement?
The Inland Revenue encourages applications for bilateral APAs in relation to cross-border transfer pricing issues. Bilateral arrangements offer an assurance that the method for dealing with the transfer pricing issues covered in the APA will be accepted by the tax administrations of both countries, thus avoiding potential double taxation.
An APA may be requested by
- any UK business, including a partnership, with transactions to which the provisions of Section 770A/ Schedule 28AA, ICTA 1988 apply;
- any non-resident trading in the UK through a branch or agency (or permanent establishment);
- any UK resident trading through a branch (or permanent establishment) outside the UK.
Potential applicants need to bear in mind that the process is designed to offer assistance in resolving complex transfer pricing issues. The Inland Revenue does not regard entering into APAs on less complex matters as a sensible use of resources in the absence of significant doubt as to the manner in which the arm’s length principle should be applied. It may therefore decline to accept applications that do not satisfy those criteria.
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