The taxing effects of the advance pricing arrangement program: A review of APAs and their impact on stakeholders
Sadiq, Kerrie (2007) The taxing effects of the advance pricing arrangement program: A review of APAs and their impact on stakeholders. Journal of Australian Taxation, 10(1), pp. 104-132.
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The current transfer pricing rules contained in Australia’s taxation regime are designed to counter the underpayment of tax by businesses engaged in international related-party dealings. Currently, these transactions must take place at an arm’s length price, a requirement which is becoming increasingly difficult to demonstrate. This results in an
increased risk of an audit by the Australian Taxation Office. If a taxpayer wishes to avoid the risk of an audit, and any ensuing penalties, there is one option: an advance pricing arrangement (‘APA’). An APA is an agreement whereby the future transfer pricing methodology to be used to determine the arm’s length price is agreed to by the taxpayer and the relevant tax authority or authorities. This article investigates the use of APAs as a solution to the problem of transfer pricing and considers their impact on stakeholders. It is argued that while APAs provide a valuable practical tool for multinational entities facing the challenges of the taxation of global trading under the current regime, they may not be a practical long term solution.
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|Item Type:||Journal Article|
|Keywords:||pricing rules, international related-party dealings, advance pricing arrangement|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
Current > Schools > School of Accountancy
|Deposited On:||19 Apr 2012 07:46|
|Last Modified:||26 Jun 2012 09:56|
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