Advance Pricing Agreement Process
An advance pricing agreement (APA) is a prior agreement between a taxable person and a tax department on an appropriate transfer pricing method (TPM) for a number of transactions that are being negotiated over a given period (so-called “hedged” transactions). The pre-sale agreement is always at the initiative of a taxable person. The APP procedure shall begin with the taxable person`s written request to the competent authority. In Finland, there is no standard format for the application, but the taxable person should check with the competent authorities of the other States the requirements set in those countries for the application for an APA (e.g. B deadlines for submission of the application, requirements relating to its content). The APA procedure is normally applied in English and it is therefore recommended to prepare the APP application in English. The competent authorities do not always reach an agreement. An ABS provides an instrument to avoid transfer pricing disputes. The experience of taxable persons and tax authorities in the context of advance pricing agreements has shown that the best way to solve complex transfer pricing problems for all parties is to cooperate before the problem becomes a problem. The search for a solution a posteriori is generally more difficult.
The Bundeszentralamt für Steuern usually charges a fee of 20,000 euros for the processing of an APA application. Special rules apply to renewals and amendments, as well as to small businesses. The fee shall be fixed before the opening of the procedure. Remuneration is governed by Article 178a of the Tax Code (AO). .