By Julie Martin, Editor, MNE Tax
The US IRS today issued its annual report providing statistics on its advance pricing agreement (APA) program. The data reveals a significant increase in the number of in new APA applications filed in 2018 as compared to previous years and a corresponding increase in the APA backlog.
APAs are agreements signed by the IRS and a multinational taxpayer and sometimes one or more other countries to resolve transfer pricing issues ahead of time.
Median time required to complete an APA in 2018 was 40.2 months, an increase over the 2017 figure of 33.8 months, which, in turn, was an increase over the 2016 figure of 32.8 months. In 2015 it took even less time, 31.9 months. Median time to complete an APA in 2014 was higher, though, at 35.3 months.