Are the Top Five Economies on Top of Advance Pricing Agreements? A Statistical Analysis

This article statistically analyses whether prominent objectives of the advance pricing agreement (APA) programme are being met in the top five economies of the world and rates the scale of satisfaction with grades of high, medium or low. The analysis highlights the high pendency of APAs wherein the average rate of disposal is inordinately long, even in renewal cases, thereby causing stagnation in the APA programme itself. Even though renewal of APAs conveys the confidence of taxpayers in the APA regimes, which is most heartening, at this pace, renewal cases will outnumber new APA filings going forward and may discourage fresh filings since tax administrations shall largely remain occupied with processing renewal cases only. In order to reinvigorate the APA regime, the article recommends, with reasons, that tax administrations may consider amending the rules and increasing the number of covered years to up to ten years in cases pertaining to renewal of APAs.