Support for advance pricing agreement and mutual agreement procedure
Support for the advance pricing agreement (APA) related to transfer pricing
The advance pricing agreement (APA) related to transfer pricing refers to an prior agreement with tax authorities on the method of calculating an arm's length price and its specific details regarding foreign affiliated transactions.
There are two types of APA: (1) bilateral APA and (2) unilateral APA.
(1) Bilateral APA
An prior agreement on the method of arm's length price calculation under a mutual agreement procedure between Japanese tax authorities and related foreign tax authorities
(2) Unilateral APA
A taxpayer works to reach an prior agreement on the method of arm's length price calculation only with Japanese tax authorities
Through support for APA and mutual agreement procedure, we provide clients with necessary help such as pre-filing consultation with tax authorities, preparation and submission of applications, and screening after the acceptance of applications. By leveraging the world's fifth-largest accounting network of BDO International, we provide support for bilateral APA in cooperation with member offices.
Support for mutual agreement procedures based on transfer pricing taxation
Companies are entitled to apply for the mutual agreement procedure to eliminate or prevent double taxation for related party transactions when such transactions will or are deemed to be subject to transfer pricing taxation in Japan or countries where other parties are located (mutual agreement procedure based on transfer pricing regulation).
In such case, Japanese companies are required to apply for the mutual agreement procedure to Japanese tax authorities while foreign related parties are required to do so to competent authorities in countries where they are located.
BDO International member offices provide support for the mutual agreement procedures related to transfer pricing taxation by mutually sharing information.