Ensure Certainty Through Advance Pricing Agreements, ABA Tells IRS

Companies should still be able to secure advance pricing agreements when they want them, the ABA said, responding to recent IRS guidance indicating that some may be redirected to another route.

Advance pricing agreements, or APAs, are agreements between companies and one or more governments that offer an assurance of certainty over the company’s transfer pricing arrangements.

The IRS in May published a memo to staff describing a new approach to APA requests. Under that approach, some taxpayers will be pointed instead to the international compliance assurance program, or ICAP. The memo describes the process and criteria by which the ...