(1) taxable persons who have entered into a foreign trade transaction and who have applied for an APA involving foreign tax authorities the right to indicate in their APA the price control method used by the laws of the foreign jurisdiction. This right is granted provided that the result of the application of this method is comparable to the results obtained through the application of the method defined in Article 105.7 of the Russian Tax Code. An Advance Pricing Agreement (APA) is an agreement between tax authorities and taxpayers on the future application of the transfer pricing policy. For many taxable persons, an APA can be an effective measure to reduce transfer pricing risks by ensuring that the level of future profitability is accepted as reasonable by tax authorities. The purpose of the bill is to clarify several provisions relating to the definition of a controlled transaction. These amendments are intended to ensure that, under German law, a prior agreement (APA) is a combination of a prior agreement between countries on transfer pricing between internationally related companies and a pre-award based on it. When concluding APAs, participating countries shall define the transfer pricing method to be applied between undertakings or related parties for a specified period. This is an administrative procedure based on applications. The purpose of the draft law is to optimize the procedure for concluding agreements on increased prices (hereinafter referred to as „APAs“), to define the conditions under which transactions can be considered controlled and to make other specific amendments to the provisions of the Russian Tax Code. Companies that want to avoid imminent economic double taxation can apply for an APA.

In Germany, the Bundeszentralamt für Steuern (BZSt) is the competent authority for the implementation of these procedures. Applications for the introduction of an APA can therefore be addressed directly to the BZSt. Here you will find the sample applicants` declarations that the applicant must submit to the authorities after signing the advance settlement agreement. Competence of the BZSt in matters of mutual agreement procedures, arbitration and APAs The applicant determines in his application the content of the APA. The application must define the scope of application, both in time and in substance. In addition, mention should be made of other countries that require advance pricing reporting. When an applicant requests a multilateral ABS (with more than two participating states), the PA consists of several bilateral ABS. On 27 March 2020, the Russian Ministry of Finance published an updated version of the draft law „On the amendment of the first part of the Russian Tax Code aimed at improving tax control over prices and on the procedure for concluding agreements on advanced prices“ (`the draft law`).

APAs – in the sense mentioned above – find their legal basis in the respective double taxation conventions (SAAs), in the respective articles on mutual agreement procedures. Germany has concluded DTAs with more than 90 countries around the world. Most of these DTAs follow the OECD`s draft international agreement. The provisions on mutual agreement procedures are set out in Article 25(1) to (3) of the OECD Model Agreement. 6. The possibility of extending the provisions of an APA to a period from the first day of the calendar year in which the taxpayer first requested the conclusion of an APA until the date of entry into force of the APA if, after examination of the first application, an APA was refused on the grounds that no reciprocal agreement was reached with the tax authorities of a foreign counterparty. . . .