USA Law and Practice Contributed by: Kim Marie Boylan, Nicholas Wilkins, Christina Culver and Kiara Williams, White & Case LLP
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures The APA programme and mutual agreement pro - cedures (MAPs) are both administered by the APMA and the same IRS personnel staff both programmes to resolve transfer pricing matters. The APMA is comprised of team leaders, econo - mists, managers, and assistant directors. 7.4 Limits on Taxpayers/Transactions Eligible for an APA APAs are available to US taxpayers for “cover- able issues” . Coverable issues include issues arising under Section 482 of the Code and other issues impacted by transfer pricing principles. Examples of other issues include: • issues related to Section 637(d) of the Code (rules for certain repatriations of intangible property); • competent authority issues arising under the business profits and associated enterprises articles of US tax treaties; • the determination of the income effectively connected with the conduct of a trade or business within the USA; and • ancillary issues such as interest and penalties to the extent the APMA has authority under the Code or a US tax treaty. The APMA’s acceptance of a taxpayer’s request for an APA is discretionary. In April 2023, the IRS issued additional internal guidance instructing APMA personnel on how to evaluate whether to accept an APA or renewal request. The guid - ance provides for a new optional pre-submission review process designed to identify roadblocks to successfully concluding an APA and encour - ages taxpayers to obtain preliminary advice from the IRS as to whether an APA is an appropriate resolution to a taxpayer’s transfer pricing issues.
7.5 APA Application Deadlines APAs are generally intended to apply primarily to prospective years but can also cover rollback years (see 7.8 Retroactive Effect for APAs ). The APMA normally expects an APA request to cover at least five prospective years and, for a unilater - al APA, the APMA must receive a complete APA application by the date the US return is timely filed for the applicable prospective year. To better co-ordinate the timing of discussions on bilateral and multilateral APAs, a taxpayer must file a bilateral or multilateral APA request no later than 60 days after a corresponding bilat - eral or multilateral request is filed with a foreign
competent authority. 7.6 APA User Fees
APA user fees must be paid through the Pay. gov website. For APA requests received after 1 February 2025, the fees are as follows:
• original APAs – USD121,600; • renewal APAs – USD65,900;
• small case APAs – USD57,500 (applicable where the controlled group has sales revenue of less than USD500 million in each of its most recent three back years, the value of the proposed covered issue(s) is not expected to exceed USD50 million in any given covered year, the aggregate value of any transferred intangible rights is not excepted to exceed USD10 million in any given covered year, and the covered issue(s) do not involve intangible property arising from or related to an intangi - ble development arrangement); and • amendments to an APA – USD24,600. 7.7 Duration of APA Cover There is no upper limit on the number of years an APA can cover. The APMA generally requires that an APA application cover at least five pro -
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