National legislation authorizes the issuance of a unilateral APA in the form of a binding decision, and bilateral or multilateral APAs may be concluded in accordance with New Zealand`s double taxation conventions. We have gradually developed this activity as the ultimate solution for complex cases with difficult facts and circumstances. The product is particularly suited to material asset issues, which can give rise to a wide variety of opinions on pricing. Our inventory of the APA can be summed up as follows. Our approach to completing each APA is tailored to the specific facts and circumstances of the taxpayer, particularly in light of the transfer pricing risks that are addressed. Since each case will be different, we have not put in place a standardized formal procedure. Taxpayers who wish to attend an APA or discuss our likely requirements should refer to the addresses of our “Formal Registration” section. Once the review is complete, we will meet with the heads of the other jurisdiction (bilateral APA) or with you (unilateral APA) to discuss disagreements and findings. While awaiting agreement, additional information and views may be exchanged. In the case of bilateral APAs, we strive to stay in touch with the subject throughout the process to ensure that the outcome agreed between the tax authorities also meets the objectives of the subject.
An initial filing fee, as set out in the IR713 application form, must be paid when the formal application for a unilateral APA is filed. Apart from cost coverage, there are no additional costs for the processing of unilateral APAs. Unilateral AAPs take the form of a binding decision. Transfer pricing issues are not considered appropriate for short-term decisions. The application must be filed at the same time as a completed private decision request – form IR713 and request for a private decision on the transfer pricing agreement – Supplementary statement – form IR713A. We found unilateral APAs successfully in inbound and Outbound transfer pricing scenarios. Although unilateral APAs are unilateral, in the event of double taxation of transactions covered by a unilateral APA, we will enter into negotiations with the relevant authority on the basis of the APA`s unilateral position. Unilateral APAs are particularly viable when small amounts are located and/or where most of the transfer pricing risk in New Zealand lies.
ADVANCE Pricing Agreements are a cooperative approach to compliance with transfer pricing. They result in considerable time and cost savings and security of results for tax administrations and multinational companies in relation to conflicting controls. APAs encourage advance compliance for taxpayers and early resolution of potential disputes. Download our transfer pricing brochure for more details. As expected, tax authorities are looking for transfer pricing to generate more revenue, to fill deficits, whether by looking into the past like North Carolina or in the future like Indiana. Indiana has proposed an APP program that taxpayers often find as a particularly effective way to obtain certainty about their future transfer pricing. However, until the results of a public APA or other voluntary disclosure in other countries for which cross-border transactions relate lead to security, taxpayers should approach the opportunity with some fear and realize that these programs could be more controversial, not less so. Our goal is to conclude bilateral APA with Australia and all unilateral APAs within six months of a formal application. We have largely complied with this timetable and achieved solid practical results.