The data below show that the average time to obtain a new bilateral APA has increased from 46.9 months in 2017 to 47.8 months in 2018. The average time to complete the new unilateral APA increased from 40.4 months in 2017 to 35.4 months in 2018. Taxpayers require tax authorities to have an APA to enable them to obtain certainty about the transfer pricing method and/or the price of the duration of weapons (ALP) to assess their international transactions. During F.Y. 2018-19, only 3 methods were used for the 164 transactions recorded in the 41 unilateral APAPs that were concluded. The chart and diagram below shed light on it. The number of agreements signed fell to 52 in 2018/2019. This is the second year in a row that the number of agreements signed has been lower than last year. The reasons for this trend are twofold. First, given the increasingly complex cases that are included in the APA program, more time is needed to analyze covered international transactions.
Second, labour shortages at the joint and assistant/ass level. The commissioners on the APA teams continued, which slowed down the processing of applications. While the above data clearly show the overwhelming preference for unilateral APAs, it is also clear that bilateral app applications have shown an upward trend in 2017-18 and that this trend continues in 2018-19. Bilateral APP applications now account for almost one-third of all applications filed. The main reasons for the increase in bilateral applications for APP are: the IRS Advance Pricing and Mutual Agreement (APMA) program published the 19th annual report of the Pre-Price Agreement (APA) on March 22, 2019, in the 2019-03 announcement. The report provides an updated discussion on the APA program, including its activities and structure for calendar year 2018, provides a useful overview of how the program works and provides some guidance on what APA applicants can expect. During the negotiation phase (only for bilateral and multilateral APAs), the credit rating agency negotiates the government with the relevant foreign tax authority to reach agreement on the approach and method of transfer pricing of the concept of APP. This may often require more analysis, research and evidence-based research to resolve differences between the transfer prices of credit rating agencies and those of a foreign tax authority.