Unilateral APAs It is possible, however, that a taxpayer can negotiate a unilateral APA in which only the taxpayer and the IRS participate. In this case, both parties are only negotiating an appropriate TPM for U.S. tax purposes. Where the taxable person is involved in a dispute with a foreign tax authority concerning the transactions covered, he or she may remedy the dispute by requesting the competent authority of the United States to initiate a mutual agreement procedure. This obviously presupposes the entry into force of an income tax agreement applicable abroad. Bilateral and multilateral AAAs are generally bilateral or multilateral, i.e. they also include agreements between the taxable person and one or more foreign tax administrations under the supervision of the cartel procedure (POPs) established in income tax treaties.  The taxable person benefits from such agreements, as it is certain that the income related to the covered transactions is not subject to double taxation by the IRS and the competent foreign tax authorities. Irs policy is to “encourage” taxpayers to seek bilateral or multilateral APAs where there are provisions of the relevant authorities. The annex begins with the definition of the different types of ABS and defines the objectives of the APP process. The suitability for conclusion of a POP-APA is examined with regard to contractual matters and other factors such as the examination status of the taxable person. Issues relating to multilateral SAAs (i.e. where there is more than one bilateral agreement) will also be discussed.
The core of the Annex deals in detail with the whole POP-ABS process, starting with the meetings preceding the submission of a proposal, its evaluation by the tax authorities, the discussion and conclusion of the mutual agreement, the implementation of this mutual agreement and, finally, the follow-up of the agreement and a possible extension. While the annex focuses on guiding tax authorities, the opportunity is to discuss how the taxpayer can best contribute to the process. Upon receipt of the application, the BZSt verifies that all conditions (including the applicant`s agreement not to contest the fees) are met for the implementation of an PA procedure. An APA procedure shall only be implemented if the request is admissible and reasoned. 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. In October 1999, the OECD published an update of the 1995 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (hereinafter referred to as the “Guidelines”). This update takes the form of a new annex to the Guidelines, which contains 91 guidelines for the implementation of pre-agreement agreements under the mutual agreement procedure (POP APAS) .. . . .