Advance pricing arrangements: Are Australia's recent reforms relevant to Canada?

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Abstract

The revenue authorities of Canada and Australia have had well-utilized advance pricing arrangement (APA) programs in place for more than two decades, and have a shared history of encouraging their multinational taxpayers to access this unique tool for managing transfer-pricing issues.
On March 17, 2011, the Australian Taxation Office (ATO) published a new practice statement on APAs. Prior to this, in response to taxpayer calls for reform in this area, the ATO had not only tendered for an independent review of its processes, but also committed itself to updating and transforming its APA program by working in conjunction with industry to co-design a more effective, relevant, and sustainable program. The new guidance contains a number of innovations that will broaden the options available to taxpayers with interaffiliate international transactions.
In Canada, the Canada Revenue Agency (CRA) has implemented a number of procedural changes to its APA program over the past year, including the introduction of certain restrictions on entry into the program. Canadian tax advisers have expressed concern that the CRAs rejection of some APA applications, driven largely by resource constraints, may be detrimental to the program.
This article examines the "best practice" changes that have recently been introduced in relation to APAs in Australia, and considers whether any of these changes might be able to inform and assist tax reform in this area in Canada.
Original languageEnglish
Pages (from-to)387-409
Number of pages23
JournalCanadian Tax Journal
Volume61
Issue number2
Publication statusPublished - 2013

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title = "Advance pricing arrangements: Are Australia's recent reforms relevant to Canada?",
abstract = "The revenue authorities of Canada and Australia have had well-utilized advance pricing arrangement (APA) programs in place for more than two decades, and have a shared history of encouraging their multinational taxpayers to access this unique tool for managing transfer-pricing issues. On March 17, 2011, the Australian Taxation Office (ATO) published a new practice statement on APAs. Prior to this, in response to taxpayer calls for reform in this area, the ATO had not only tendered for an independent review of its processes, but also committed itself to updating and transforming its APA program by working in conjunction with industry to co-design a more effective, relevant, and sustainable program. The new guidance contains a number of innovations that will broaden the options available to taxpayers with interaffiliate international transactions.In Canada, the Canada Revenue Agency (CRA) has implemented a number of procedural changes to its APA program over the past year, including the introduction of certain restrictions on entry into the program. Canadian tax advisers have expressed concern that the CRAs rejection of some APA applications, driven largely by resource constraints, may be detrimental to the program.This article examines the {"}best practice{"} changes that have recently been introduced in relation to APAs in Australia, and considers whether any of these changes might be able to inform and assist tax reform in this area in Canada.",
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Advance pricing arrangements: Are Australia's recent reforms relevant to Canada? / Markham, Michelle.

In: Canadian Tax Journal, Vol. 61, No. 2, 2013, p. 387-409.

Research output: Contribution to journalArticleResearchpeer-review

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N2 - The revenue authorities of Canada and Australia have had well-utilized advance pricing arrangement (APA) programs in place for more than two decades, and have a shared history of encouraging their multinational taxpayers to access this unique tool for managing transfer-pricing issues. On March 17, 2011, the Australian Taxation Office (ATO) published a new practice statement on APAs. Prior to this, in response to taxpayer calls for reform in this area, the ATO had not only tendered for an independent review of its processes, but also committed itself to updating and transforming its APA program by working in conjunction with industry to co-design a more effective, relevant, and sustainable program. The new guidance contains a number of innovations that will broaden the options available to taxpayers with interaffiliate international transactions.In Canada, the Canada Revenue Agency (CRA) has implemented a number of procedural changes to its APA program over the past year, including the introduction of certain restrictions on entry into the program. Canadian tax advisers have expressed concern that the CRAs rejection of some APA applications, driven largely by resource constraints, may be detrimental to the program.This article examines the "best practice" changes that have recently been introduced in relation to APAs in Australia, and considers whether any of these changes might be able to inform and assist tax reform in this area in Canada.

AB - The revenue authorities of Canada and Australia have had well-utilized advance pricing arrangement (APA) programs in place for more than two decades, and have a shared history of encouraging their multinational taxpayers to access this unique tool for managing transfer-pricing issues. On March 17, 2011, the Australian Taxation Office (ATO) published a new practice statement on APAs. Prior to this, in response to taxpayer calls for reform in this area, the ATO had not only tendered for an independent review of its processes, but also committed itself to updating and transforming its APA program by working in conjunction with industry to co-design a more effective, relevant, and sustainable program. The new guidance contains a number of innovations that will broaden the options available to taxpayers with interaffiliate international transactions.In Canada, the Canada Revenue Agency (CRA) has implemented a number of procedural changes to its APA program over the past year, including the introduction of certain restrictions on entry into the program. Canadian tax advisers have expressed concern that the CRAs rejection of some APA applications, driven largely by resource constraints, may be detrimental to the program.This article examines the "best practice" changes that have recently been introduced in relation to APAs in Australia, and considers whether any of these changes might be able to inform and assist tax reform in this area in Canada.

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