HMRC strives to complete the APA process within 18 to 21 months of formal application and recognizes that the unilateral APA can be completed much more quickly. The timing of bilateral and multilateral AGREEMENTs also depends on the procedures of the relevant administrations in the other country (or in the countries). Data published for fiscal year 2017/2018 indicate that the average time required to reach an agreement was 37.1 months, with 50% of the APA being agreed within 35.1 months, which is significantly longer than HMRC`s forecast. The main advantage of a company in obtaining an APA is that it is confident that HMRC (if the terms of the APA are met) accepts the treatment of the company`s transfer pricing issues for the duration of the agreement. Bilateral and multilateral APAs are more useful in this regard, as they offer similar assurances with respect to the tax administration of the other jurisdiction, minimizing the risk of double taxation. 19. Where a British company has an APA and the provision in question is linked to a related British company, Section 222 TIOPA 2010 allows the other British company to argue that its profits are adjusted for the APA if they are disadvantaged. However, Hmrc tries to avoid such problems by encouraging the company to agree, as far as possible, that the transfer pricing method sets the commercial burden on the provision and levy for tax purposes. 39.

HMRC expects the company to facilitate an effective process by providing timely and all the information necessary to properly review the application and reach an agreement. The same applies to the cooperation of the company to ensure that the formal agreement and all related procedural documents will be concluded with the contracting parties shortly after the completion of the transfer pricing method and/or as part of a bilateral or multilateral process. 10. Companies operating in several countries may apply for APAs involving all jurisdictions involved in transfer pricing issues. The term “multilateral APA” has been used to describe such agreements, but there is no discrete mechanism for multilateral agreements, and multilateral EPAs are rigorously multiple and complementary to bilateral APAs. 37. A “simple vanilla” agreement model is attached to Schedule 2 as an appendix to this statement. As a general rule, the person responsible for signing the agreement on behalf of the company would be the person responsible for signing a tax return, subject to the person entitled, within the multinational, to compel the group to meet the requirements of the APA. HMRC, and generally its contractual partners, expect the actual pricing of APA-covered transactions to be consistent with the transfer pricing method and the conditions set out in it. Adjustments resulting from the calculation of the tax should also be made in accounting, which will ensure that the economic and fiscal position of the arm length price is equalized. 40. Tax administrations are not in a position to obtain the APA MAP, which has been concluded between the relevant authorities in their case, and the company cannot take advantage of it unless the necessary internal documents are completed.

In the United Kingdom, a written agreement is required between the Commissioners (or their representatives) and the persons concerned in the United Kingdom in the APA legislation. If the terms of the agreement are met, the agreement guarantees the company that the treatment of these transfer pricing issues will be accepted by HMRC for the period covered by the agreement. 45. The specific requirements of each report will be set out in the final agreement and will focus closely on the issue addressed by the APP. The general intention is that the management reports – in a limited format – show whether the company has complied with the terms of the APA`s sale.