In the Guidelines (see paragraph 4.140) the arrangements solely between a taxpayer or taxpayers and a tax administration are referred to as “unilateral APAs”. The Guidelines encourage bilateral APAs and recommend at paragraph 4.173 that “Wherever possible, an APA should be concluded on a bilateral or multilateral basis between competent authorities through the mutual agreement procedure of the relevant treaty.” A bilateral APA is based on a single mutual agreement between the competent authorities of two tax administrations under the relevant treaty. A multilateral APA is a term used to describe a situation where there is more than one bilateral mutual agreement.
TPG2022 Chapter IV Annex II paragraph 5
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Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Annex II to Chapter IV – Conduction of APA and MAP | Tag: Bilateral APA, Multilateral APA, Unilateral APA
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- TPG2022 Chapter IV paragraph 4.158Unilateral APAs may present significant problems for tax administrations and taxpayers alike. From the point of view of other tax administrations, problems arise because they may disagree with the APA’s conclusions. From the point of view of the associated enterprises involved, one problem is the possible effect on the behaviour...
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