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Advance Transfer Pricing Agrement

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I have been asked by my employer to prepare and agree with HMC, an advance trransfer pricing agreement for a UK company with cross-border activity with Switzerland.  The problem that I have is that there is nobody in-house who has any experience of this whatsoever including me!

I have a few questions.  I appreciate that a few of them may be "how long is a piece of string" in nature:

1.  Is it something that should be tackled with no prior experience and no supervision?
2.  How long would the typical timeframe be between application and agreement?
3. How much would a reputable firm typically charge for this?
4. Can anybody recommend a firm that we could potentially sub-contract this work to?

Any help greatly appreciated as I am feeling distinctly uneasy about the whole thing.

Many thanks.

 

 

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By Accountant A
02nd Nov 2018 11:48

Simontax wrote:

1.  Is it something that should be tackled with no prior experience and no supervision?

I'd have said absolutely not. It's a specialist field.

In answer to 2 and 3, it depends on the size and complexity of the subject matter (eg one simple transaction type v multiple different activities).

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By Simontax
02nd Nov 2018 16:41

Thank you Accountant A.

You have confirmed my own thoughts on the matter.

Have a great weekend.

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Replying to Simontax:
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By Accountant A
02nd Nov 2018 17:19

Simontax wrote:

Thank you Accountant A.

You have confirmed my own thoughts on the matter.

Have a great weekend.

You're welcome. BER has given a more useful summary.

If you are interested you could have a look at the HMRC manuals on the subject, but absent some considerable practical experience, I wouldn't get involved.

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By BER
02nd Nov 2018 17:03

Agree with Accountant A, this is a complicated area and you should engage someone externally.

In terms of time frames, it does depend on the nature of the transaction but they are not quick. I've done a fair few APAs and even a quick one is generally 18 - 24 months, but HMRC's own stats have the current average at over 3 years to sign.

Its also worth noting that HMRC are not letting companies into the APA program easily. I had a recent expression of interest meeting with HMRC on an APA and they were clear that the risk of double taxation has to be high, and that either the business or transaction was sufficiently complex. Last year they rejected 6 of the 16 APA applications made.

In terms of who to use, the larger accountancy firms (Top 10 I'd have thought) will have TP teams with experience, as will some of the law firms. You'll probably want a decent sized firm who also have a Swiss office as you may be required to do the APA bilaterally with the Swiss Tax Authority simultaneously.

Given the time frame and complexity, expect the work to be pricey.

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Replying to BER:
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By Simontax
02nd Nov 2018 17:46

Thank you BER. That is a great insight.

Have a great weekend.

Simon

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