APA and BAPA Advance Pricing Agreement

In today's dynamic business environment, where international transactions are becoming increasingly complex, Advance Pricing Agreements (APAs and BAPAs) are an extremely effective tool that enables companies to ensure that their transfer pricing policies comply with applicable legal regulations.

APA and BAPA allow companies to agree in advance with the tax administration on the methods of setting transfer prices in transactions between related parties. This allows companies to reduce tax risk, avoid potential disputes with tax authorities and increase the security of transfer pricing settlements.

As part of our service, we offer comprehensive support in the process of obtaining APA and BAPA, ensuring companies maximum tax protection and the effectiveness of their transfer pricing policy.

The scope of our service

The process of obtaining APA or BAPA requires a thorough analysis of the transaction and a reliable preparation of an application to the Head of the National Revenue Administration in accordance with the requirements of the law. Our support includes the following stages:

Analysis of the transaction and preparation of a detailed description of the circumstances surrounding the agreement

Assessment of the nature and scope of the transactions covered by the agreement.
Identification of potential tax risks associated with established transfer prices.
Analysis of applicable regulations and OECD guidelines on transfer pricing.

Support in selecting the appropriate method for determining transfer prices in accordance with applicable regulations

Selection of the most appropriate transfer pricing method for the transactions covered by the arrangement (e.g. comparable uncontrolled price, cost plus, transaction net margin, etc.).
Preparation of a comparative analysis confirming that the prices of the controlled transaction are concluded in accordance with transfer pricing principles.
Development of a justification for the selected pricing method.

Preparation of an application for an advance pricing agreement (APA or BAPA) together with the required attachments

Preparation of a complete application in accordance with the formal requirements of the tax administration.
Inclusion of required financial and economic analyses.
Preparation of additional supporting documentation, e.g. descriptions of the functions and assets of the transaction parties, a list of the income allocation methods used, etc.

Representing the client before tax authorities at every stage of the proceedings

Conducting negotiations with the tax administration.
Participating in meetings and consultations on behalf of the client.
Monitoring the course of the proceedings and responding to questions and comments from tax authorities.

Monitoring the course of the proceedings and adapting the application to changing requirements

Tracking changes in transfer pricing regulations and taking them into account in the APA/BAPA obtaining process.
Ongoing updating of documentation in line with new legal requirements.
Analysis of the impact of possible organizational changes in the enterprise on the terms of the pricing agreement.

Benefits of our service

Obtaining an APA or BAPA is a key element of your tax risk management strategy. Using our service provides your company with the following benefits:

Tax certainty

Bilateral advance pricing agreements (BAPAs) eliminate the risk of tax authorities challenging the agreed transfer prices.
APA/BAPA ensure the security of settlements in transactions between related entities.
Possibility to avoid additional tax liabilities resulting from corrections made by the tax administration

Minimizing compliance costs

After obtaining an APA or BAPA, the costs associated with handling transfer pricing (TP) documentation are reduced.
Less involvement of company resources in the process of preparing TP documentation.
Simplification of transfer pricing reporting for transactions covered by the agreement.

Reduced risk of control

Once an APA or BAPA is obtained, the transaction is protected against questioning its settlement during a tax audit.
Possibility to avoid lengthy investigations and possible disputes with the tax administration.
Transparency of settlements with tax authorities increases the company's reputation and its credibility with business partners.

Better protection against double taxation

BAPAs, as bilateral agreements, reduce the risk of double taxation resulting from differences in the interpretation of regulations between countries.
Mutual agreements between tax administrations minimise the risk of international transfer pricing disputes.

Support in the event of changes in the structure of the capital group

Analysis of the impact of mergers, acquisitions and reorganizations on previously concluded pricing arrangements.
Adaptation of TP's strategy to the new operating conditions of the enterprise.
Ongoing advice on the implementation of changes resulting from the evolution of tax regulations.

Why is it worth using our support?

The process of obtaining APA and BAPA requires advanced tax knowledge and experience in negotiations with the tax administration. Our team of experts specializes in the area of transfer pricing and advance pricing agreements, so we can guarantee professional support at every stage of the procedure.

We help companies not only to effectively obtain APA/BAPA, but also to monitor changes in regulations and adjust transfer pricing policy to current regulatory requirements. Our comprehensive approach minimizes tax risk and allows for full compliance with applicable standards.

If you would like to benefit from professional support in the process of obtaining APA/BAPA, please contact us.

Izabela Wójcik
Director, Tax Advisor

Paweł Turek
Partner, Attorney-at-law, Tax Advisor