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OECD Bilateral Advance Pricing Arrangement Manual — Orbitax Tax News & Alerts

The OECD has published the Bilateral Advance Pricing Arrangement Manual. The Manual is part of the tax certainty work programme of the Forum on Tax Administration (FTA) and was produced jointly by members of the FTA MAP Forum and its focus group on Identifying improvements to the Advance Pricing Agreement (APA) process. The document was approved by the Inclusive Framework on BEPS, as well as all members of the FTA, on 6 July 2022.

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Bilateral Advance Pricing Arrangement Manual

Dispute prevention is a fundamental tenet of tax certainty. Bilateral Advance Pricing Arrangements ("BAPAs"), in a growing number of cases, have successfully contributed to providing advance tax certainty to both taxpayers and tax administrations, ensuring predictability in the tax treatment of international transactions. However, stakeholders have identified obstacles that prevent an optimal use of BAPAs. In continuing with its commitment to advancing the tax certainty agenda, the FTA MAP Forum, in conjunction with the FTA Large Business International Programme, has developed the Bilateral Advance Pricing Arrangement Manual ("BAPAM") which is intended as a guide for streamlining the BAPA process. The BAPAM provides tax administrations and taxpayers with information on the operation of BAPAs and identifies 29 best practices for BAPAs without imposing a set of binding rules. As part of the BAPAM's development, tax administrations have committed to assessing whether implementation of these best practices is appropriate, considering the circumstances of their own BAPA programme and the unique features of each BAPA application, so that the best practices are applied appropriately and with enough flexibility to improve current BAPA processes. The BAPAM also highlights what tax administrations expect from taxpayers in the BAPA process to facilitate a cooperative and collaborative process.