APA annual report shows significant improvement

 

The IRS has released new statistics in its 25th annual report (Announcement 2024-16) on the Advance Pricing Agreement (APA) program.

 

The report provides key statistical information on APA applications received, resolved, and pending in a manner that demonstrates the countries involved, types of transactions, time to resolve and transfer pricing methods, including:

  • APMA headcount: The IRS Advance Pricing and Mutual Agreement (APMA) program continued to add staffing to keep pace with its inventory of APAs and Mutual Agreement (MAP) cases. Headcount increased from 97 at the end of 2022 to 114 in 2023.
    APA applications: APMA received 167 APA applications in 2023, down slightly from 183 in 2022. Japan (30%), India (21%) and Canada (14%) were the three highest countries with bilateral APA requests. APMA executed a record high 156 APAs in 2023, up substantially from 747 APAs in 2022. Japan (32%), India (17%) and Italy (11%) were the three highest countries with bilateral APA closures.
  • APA inventory: APMA’s inventory of pending APAs decreased slightly. Japan (25%), India (23%) and Canada (13%) were the three highest countries with pending bilateral APA requests. 
  • APA length: As can be seen by the following chart, the time to complete an APA declined slightly in 2023.
Grant Thornton Insight

The statistics support the understanding that the APMA program is well-staffed and able to handle an increasing caseload of APAs and MAP procedures. These processes remain an excellent option for taxpayers to address transfer pricing risk.

 

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