Virus May Push Governments to Revisit Advance Pricing Agreements

The economic disruptions caused by the pandemic could push tax authorities to reconsider how current advance pricing agreements are structured, an IRS official said Tuesday.

That could mean changing the timing for when agreements expire, John C. Hughes, director of the IRS Advance Pricing and Mutual Agreement program, said during a Baker McKenzie LLP webinar.

“We and other competent authorities have been willing to entertain the idea of cleaving off 2020, so having an APA formally terminate as of 2019, and then have 2020 be the first year in a renewal through 2025 or something,” he said.

APAs are contracts ...