Following the signing of the pre-price agreement with the State or foreign countries, BZSt informs the applicant in writing of the result and asks him to approve the content of the agreement. In addition, the applicant is asked to waive his right of appeal to the tax office. Once the applicant has agreed to the content and waived his right of appeal, the tax office grants the applicant the corresponding mandatory prior obligation to implement the pre-transfer prices at the national level. Under German law, a pre-price agreement (APA) is a combination of a prior agreement between the federal states on the transfer price between internationally linked companies and an expanded obligation based on it. At the end of the APA, the participating countries determine the method of transfer pricing to be applied for a fixed period in the future between the related companies or certain parts of the companies concerned. This is an administrative procedure based on requirements. Tax Security Day brought together more than 200 tax policy makers, tax authorities, business representatives and other interest groups from more than 50 countries. They provided an update on the status of the tax security agenda and discussed ways to make further improvements, both in dispute resolution and dispute resolution. Discussions focused on all tax instruments available to tax administrations, including cooperative compliance programs, pre-price agreements, the International Compliance Insurance Program (ICAP), Joint Review and the Mutual Agreement Procedure (MAP). On Tax Security Day, France also joined the ICAP pilot experiment, bringing the total number of tax administrations participating in ICAP to 18. The meeting noted the importance of the recent OECD report on taxpayer morale. The report examines the latest findings on the importance of tax security as a determinant of companies` willingness to participate positively in the tax system, particularly in developing countries. Here are the models of applicants` declarations that the applicant must submit to the authorities after the signing of the pre-price agreement.
In its application, the applicant determines the content of the APA. The application must define the scope of both time and substance. In addition, it is worth mentioning the other countries with which a pre-agreement on transfer pricing is to be concluded. If an applicant requests a multilateral APA (with more than two participating states), the APA consists of several bilateral APAs. AAAs – in the aforementioned sense – find their legal basis in the Double Taxation Conventions (DBA), in the respective articles on mutual agreement procedures. Germany has concluded DBA with more than 90 countries in the world. Most of these DBAs follow the OECD`s draft international agreement. The provisions on mutual agreement procedures are set out in Article 25, paragraphs 1 to 3, of the OECD Model Convention. Companies that wish to avoid the threat of double economic taxation in advance can apply for an APA. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. Applications to open an APA can therefore be filed directly with the BZSt.
BZSt`s jurisdiction with respect to mutual agreement, arbitration and APAs procedures The double taxation agreement can be found on the website of the Federal Ministry of Finance. Under the agreement, the Commission receives annual statistics from Member States on unpaid debts at the end of each year: Read the EC report (July 2019) of the APP statistics for 2018 [PDF 341 KB] The European Union Arbitration Convention has set up a procedure for settling compensation disputes between Member States.