APA: a lighthouse in the transfer pricing vast sea

On 30 March 2022 the Internal Revenue Service (IRS) released the latest statistics on Advance Pricing Arrangements (APAs) in the United States for 2021. The number of new applications, including renewals, increased compared to previous year and represent 5% of the total number of requests lodged across a period of 30 years (1991-2021). This demonstrates the growing interest of multinationals to approach cooperation and compliance, which are key instruments to reduce tax risks. Albeit data focus on US procedures, they give us the opportunity to make a comparison between US and Italian figures, provide an overview of the Italian framework and try to predict some future trends. In a global environment where macroeconomic trends show soaring energy prices, shortage of raw materials with the related disruption of supply chains, an uneven global economic recovery, geopolitical disruptive events such as the current war in Ukraine and the continued transition towards digitalization, multinationals have several business challenges to face. APAs are strategic instruments to tackle transfer pricing complexity, leaving CEOs focusing on the development of their business rather than spending time and money in long-standing tax litigations with uncertain results with tax authorities in different jurisdictions.

Covid-19 Update