The complexity and changing nature of APAs 

Sean Foley
Global Leader
KPMG's Global Transfer Pricing Services

Francois Vincent
KPMG's Leader
Global Transfer Pricing Dispute Resolution

Montserrat Trape
Global Transfer Pricing Services
EMEA Leader

Montserrat: At the moment it is a unique opportunity just to look whether APAs are for you, and why is that? There’s several reasons. One of them is audits. Once you have got the challenge of an audit, an audit in which you don’t know what the outcome is going to be, that it is not enough for you to be sure that your transfer pricing policy is strong. You have got a risk. Let’s not talk about penalties or interest for the late payments which can be a huge of a lot of money. When that happens, one has to look about managing risks in a different way and APAs can be the tool.

Francois: The OECD right now has embarked on a tax simplification exercise, that includes transfer pricing. I think as part of that tax simplification exercise we also have to look at APAs and how APAs are currently being conducted will view to simplifying the process, to make it a simpler, swifter process.

Sean: The Australian tax office had led the charge here by putting together a pilot program and really using risk assessment to try to drive cases that could be dealt with more quickly. You need to sort out the cases that are easier from the cases that are harder and the easier cases need to get done quickly.

Montserrat: The APAs permit you to plan your transfer pricing, to really do strategy along getting an agreement with the, or different, tax authorities and this is certainly a plus. But at the end of the day, if you do your homework well, if you have a good transfer pricing policy, if you know how to manage those difficulties of understanding that they may have, if sometimes you are able to be flexible when you think that you may have stopover, you are really bound to have a good result and I would say within a very decent time period.