Transfer Pricing 2025

AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria

7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing The Austrian system incorporates an APA pro - gramme, encompassing unilateral measures (referred to as “advance ruling” ) in addition to bilateral and multilateral measures. A bilateral and multilateral APA can be required to clarify the basis for transfer pricing for trans - actions falling under Article 7 or Article 9 of the OECD Model Tax Convention on Income and Capital and to clarify how the profits realised are distributed among the tax jurisdictions con - cerned. A bilateral and multilateral APA may concern transfer pricing issues of one or more taxpayers or be limited to individual intra-group transactions. A bilateral and multilateral APA is thus a formal written agreement between the ATA and the tax authorities of a treaty partner state, with the aim of governing the appropriate transfer pricing method and transfer prices for a forward-looking period (usually three to five years). In other words, a bilateral and multilateral APA is concluded for future years and transac - tions. The initiation of bilateral and multilateral APAs is typically pursued by the taxpayer concerned. Nevertheless, the taxpayer possesses no legal entitlement to the successful execution of the APA in question. It is important to note that the resolution of bilateral and multilateral APAs is often a process that extends over several years. It is evident that bilateral and multilateral APAs are grounded in the framework of the mutual agreement procedure articles of the relevant double tax treaties, as outlined in Article 25 of the OECD Model Tax Convention on Income and

Capital. Consequently, the absence of domestic regulations pertaining to bilateral and multilateral APAs is notable. Unilateral advance rulings can be requested by the taxpayer on the basis of Section 118 of the FFC in the case of international tax topics, including transfer pricing topics. However, it is to be noted that a unilateral advance ruling can only be requested for future fact patterns, mean - ing that the facts of the case must not already have been implemented. 7.2 Administration of Programmes The Austrian Ministry of Finance administers the programme. 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures As mentioned in 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing and stated in Article 25 of the OECD Model Tax Convention on Income and Capital, bilateral and multilateral APAs are based on the mutual agreement pro - cedure articles of the respective double taxa - tion conventions. In the event that negotiations on mutual agreement procedures (for the past) and APAs (for the future) take place at the same time for the same fact pattern, they are usually combined. 7.4 Limits on Taxpayers/Transactions Eligible for an APA The scope of the respective double taxation convention imposes limitations on bilateral and multilateral APAs with regard to future transac - tions that fall under Article 7 or Article 9 of the OECD Model Tax Convention on Income and Capital. However, in cases where a past fact pat - tern is concerned, then the APA would simply be a mutual agreement procedure.

CHAMBERS.COM