The US IRS on March 31 released statistics on the performance of the IRS’s Advance Pricing Mutual Agreement Program (APMA), revealing that taxpayers submitted many more applications for advance pricing agreements (APAs) in 2015 than in previous years.
The IRS also released a model APA agreement and said that it was working on revising it. The last major revision to the APA model occurred in 2009, the Service said.
According to the IRS data, applications for new APAs totaled 183 in 2015, significantly more than in prior years. In 2011, 2012, 2013, and 2014, applications numbered 96, 126, 111, and 108, respectively.
Of the 2015 APA applications, 52 were unilateral APAs, 127 were bilateral APA, and 4 were multilateral APA. Filings in each category were higher in 2015 than in earlier years. During 2011—2014, applications for unilateral APAs ranged from 20–31 filings, applications for bilateral APAs ranged from 74–101 filings, while applications for multilateral APAs ranged from 0–3 filings.
APAs signed in 2015 totaled 110, as compared to 101 in 2014, 145 in 2013, and 140 in 2012. Of the APAs signed in 2015, 30 were unilateral, 80 were bilateral, and zero were unilateral. A total of 66 were APAa renewals.
A “notable milestone” achieved by APMA in 2015 was the signing of the US’s first bilateral APA involving Italy, the Service said.
Of all bilateral APAs signed in 2015, more than half involved either Japan or Canada; 46 percent involved Japan and 23 percent involved Canada.
Total cases remaining in inventory in 2015 numbered 410, an increase over last year’s total of 336.
The median time to complete the APA signed in 2015 was 31.9 months. This is an improvement over APAs executed in 2014, which required 35.3 months to complete.
The Service also said that 64 percent of the APAs involved a non-US parent and its US subsidiary.
Also consistent with prior years, the primary transfer pricing method used for APAs executed in 2015 was the comparable profits method/transactional net margin method.
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