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Advance Pricing Agreement Program

The total time before an APA is concluded does not necessarily correspond to the sum of the due diligence, negotiation and post-negotiation phases. In some cases, cases were put on hold, while the CRA waited for further information from a taxpayer. Cases of this type usually occur when a taxable person re-establishes his or her suitability for the APA programme or cannot provide the necessary information to rating to carry out an in-depth analysis of financial and transfer pricing. In other cases, the delays are due to the fact that the APA programme requires additional information from the taxable person or the simultaneous exchange of position documents between tax administrations before the start of negotiations. These delays are included in the completion times during the respective phases of the APA process. Next year, the CRA will review the ABS program to explore ways to shorten this timeframe. The Advance Pricing Arrangement (APA) program is an important part of our compliance assurance strategy. APAs offer you the opportunity to enter into an agreement with us on the future application of the arm`s length principle to your transactions with international related parties. In preparation for the program update, the CRA is reviewing its ABS process to identify ways to improve timeliness. The goal, combined with updated information circulars, is to make the ABS program faster and more responsive to the needs of our taxpayers, while ensuring consistent compliance with Canadian tax rules. After considering the nature of the request, the availability of information and the taxpayer`s willingness to address potential issues identified during or after the preliminary meeting, it will be decided whether or not to include the taxpayer in the next phase of the APA process.

A taxable person invited to continue the process must prepare a detailed filing of the ABS detailing the details of the transaction(s) covered, including a detailed transfer pricing analysis and all relevant information necessary for the credit rating agency to verify and complete its own transfer pricing analysis. Once the credit rating agency has received the filing of the taxable person`s APA and verified its completeness, it shall be decided to accept or reject the abs` application for ABS submitted by the taxable person. Typically, a bilateral ABS is a binding agreement between two tax administrations and the taxpayers concerned.