We have gathered feedback from the tax authorities of various key countries to find out the specifics about their APA programs. Read the following Q&A interview on the topic of APAs in Portugal with the Portuguese tax authority.
Q: What are, in your view, the main achievements of your APA program?
- Good image (openness/professional/friendly) passed to the taxpayers.
- Greater certainty achieved with such an option for both taxpayers and tax authorities.
Issues and challenges
Q: What are the main challenges facing your APA program?
- Subjectivity involving transfer pricing in general.
- Time of response of other tax authorities.
- Lack of experience of tax authorities/taxpayers.
Q: Are there particular substantive issues (for instance, marketing intangibles or buy-ins for cost-sharing arrangements, etc.) that have been more difficult to deal with?
Q: Are there particular procedural issues (for instance, APAs involving more than two jurisdictions or APAs where prior years are under the mutual agreement procedure and these involve large proposed adjustments, etc.) that have been more difficult to deal with?
A: Time of response/capacity to reach an agreement of other tax authorities.
Q: Are there any other issues that you would like to bring to the attention of taxpayers as potentially difficult?
A: See above.
Q: From your experience, what are the main best practices that you would recommend that taxpayers adopt in requesting and filing for an APA?
- Open mind.
- Be transparent.
- Think having the future in mind, and not the past.
Trends and outlook
Q: Based on your experience, have you noticed certain trends in any of the following topics:
- Transfer Pricing Methodology (TPM) proposed
A: All except the PSM.
A: Usually not different that proposed, but the sample is not representative.
A: All the ones mentioned and also a sequential APA strategy.
A: Not relevant.
Q: Looking to the future, what do you foresee for APAs?
A: Not particularly relevant, but may tend to increase.
A: Not relevant.
A: We have some cases in the recent year.