The annual report on the advance pricing and mutual agreement (APMA) program was issued by the IRS on 27 March 2014. The APMA program takes place as part of the work of the Large Business and International Division of the IRS. The report shows that there were 145 APAs completed in 2013, most of which were bilateral APAs. A total of 111 new APA applications were filed in the year, of which 20 were for unilateral, 89 for bilateral and 2 for multilateral APAs.
The report gives additional detail of the types of tested parties, types of transactions that were the subject of APAs, methods used, critical assumptions and the period of time required to complete the APA negotiations. The median time for completing an APA was 32.7 months, a reduction compared to previous years.
Taxpayers will note that although the median time to complete an APA was reduced in 2013, applicants will be looking for further reductions in completion time in future. Taxpayers applying for an APA will need to have some assurance that the process will be successfully completed in a reasonable time frame, in view of the compliance costs involved for taxpayers in providing the relevant information to the IRS.
