Friday, 19 May 2017

US 2016 APA report shows greater consistency with prior years after historic number of requests in 2015

The IRS Advance Pricing and Mutual Agreement Program (APMA) on March 27 issued its 18th Annual Statutory Report concerning Advance Pricing Agreements (APAs).  The Report reveals that APA applications for 2016 decreased to 98 filed requests, down from a record high of 183 requests filed in 2015.  The 2015 surge  was driven by the then impending effective date of the new APA procedural requirements and higher user fees announced in Rev. Proc. 2015-41.

While significantly decreased from 2015, the number of filed requests in 2016 is on par with pre-2015 levels, where APA applications in each of the five years preceding 2015 averaged about 100 requests.  These numbers indicate that APAs continue to be an attractive option for companies seeking to manage their tax risks and achieve certainty around their intercompany pricing issues.

Source: PwC