Advance Pricing Agreement Japan

Yes, the APA program is independent of the audit function of the tax authorities and the relevant authorities that deal with other cases of double taxation. All of the subject`s documents are returned to the subject if the subject`s application for APA is not approved or cancelled by the DGT. The DGT may not use documents for tax audit and tax investigation purposes during the APA process. The cases of the mutual agreement procedure were handled by the Directorate of International Taxation. Following an APA, the tax authority undertakes not to adjust or review the pricing of certain transactions under an agreed-upon transfer pricing method for a specified period (usually 3 to 5 years). For some subjects, obtaining an APA can provide an effective solution to the risk of transfer pricing controls. Applications for Apa have continued to increase in Japan. In 2007, 113 bilateral APA applications were filed, more than double the number recorded in 2002. An APA is a solution for taxpayers seeking maximum security in compensation prices for future years. Our transfer pricing professionals can facilitate and support the entire APP process: does the country have a pre-price program (APA)? If so, is the program widespread? Are there unilateral, bilateral and multilateral APAs? There are some problematic factors in the AAP agreement with the DGT: from 2008, APA applications must be filed before the start of the fiscal year to which the APA is to report. Several informal pre-consultation meetings with NTA auditors are usually required before an application is formally adopted.

According to NTA reports, the APA`s bilateral applications have an average processing time of between 2 and 3 years. It takes much longer to get a multilateral APA. The filing of an APA return by the subject does not stop a transfer pricing check if it is already in progress. The main advantages of ASAs are minimizing transfer pricing disputes, ensuring legal certainty and easing the calculation of taxes. As a general rule, the entire application process for an UAPA can take six to eighteen months to complete, while a BAPA application takes three years, as required by the tax treaties between Indonesia and the partner country of the tax treaty. Regulation 22/PMK.03/2020 of the Prime Minister on the procedure for implementing the pre-price agreement (PMK-22) defines the procedure or procedures for obtaining an APA in the next two major steps.