US Inbound: New IRS APA report shows significant decrease in APA requests
International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

US Inbound: New IRS APA report shows significant decrease in APA requests


Jim Fuller

David Forst

In Announcement 2017-3, 2017-15 I.R.B. 1, the US Internal Revenue Service (IRS) released its annual report on advance pricing agreements (APAs) for the 2016 calendar year. Fewer APAs were executed than in the prior year, and it took slightly more time to complete them. Of the 86 agreements executed in 2016, 37 were new APAs. This was a decrease from the 44 new APAs executed in 2015.

Perhaps even more interesting is that almost 50% fewer APA applications were filed in 2016 (98) compared with the previous year (183). We wonder whether this might be a result of European state aid assertions, Eaton's APA revocation, BEPS, or a combination of these factors.

Advance pricing agreements executed with Japan constituted 54% of bilateral APAs. Canada accounted for another 20%. Thus, nearly three quarters of the total number of bilateral APAs executed in 2016 involved the US entering into mutual agreements with either Japan or Canada. Only 9% of identified-country APAs were with EU countries.

Of the bilateral APAs filed in 2016, 31% of involved Japan and 34% involved India. No other country accounted for more than 8%. Only 11% were filed regarding identified EU countries.

There was also a surprising number of withdrawn APAs during 2016: 24. This was the most since 2002 when 26 were withdrawn. In 2015, only 10 APA requests were withdrawn, and in 2014 only one request was withdrawn.

Of the APAs executed in 2016, 76% were inbound APAs and 24% were outbound APAs. In these percentages we have ignored the "sister companies" category. Inbound APAs involve a non-US parent and a US subsidiary, and outbound APAs involve a US parent company and non-US subsidiary.

New unilateral APAs in 2016 took on average nearly three years to be issued, and new bilateral APAs took over four years on average to be issued. Renewal APAs in each case took a somewhat shorter time. Unilateral APA renewals took slightly short of two years and bilateral renewals took slightly short of three years.

Jim Fuller ( and David Forst (

Fenwick & West


more across site & bottom lb ros

More from across our site

New requirements for advisers to inform clients of any relevant matters that might impact their relationship have raised concerns from a raft of professional bodies
The fallout from PwC China’s Evergrande audit has reportedly hit the firm hard; in other news, the US and Turkey look to reform their corporate tax rates
Canada risks inflaming US trade relations in a presidential election year and increasing costs for consumers, according to local experts
Dudbridge, ForrestBrown director and head of its advisory practice, FB Consulting, tells ITR about the joys of tax advisory work, what he finds most exciting about the role and what makes tax cool
A UK court rejected Tills Plus’s claim for R&D tax credits due to a lack of technological advancement
View the Social Impact EMEA Awards 2024 shortlist and join us on September 12 at The Waldorf Hotel in London
The announcement is due to be made during the country’s Union Budget statement next week, according to reports
Around 30 roles are to be cut as the firm’s tax controversy and disputes practice will be incorporated into its tax division
The Labour Party has made ambitious commitments to close the UK’s ‘tax gap’, but how can they do it, and what will it mean for business?
The refreshed leadership team does not include Paddy Carney, who previously made headlines for her dual role on PwC Australia’s and PwC International’s boards
Gift this article