As the graph below shows, AAAs with Japan have more than any other country 49% of bilateral APAs achieved in 2019. This is due to the maturity of APP programs in the United States and Japan, as well as the experience of negotiations between the APMA team and the relevant administrative team representing Japan`s national tax administration. – The total number of APMA employees remained the same as of December 31, 2019, with 77 professionals. The number of APA applications has decreased, with taxpayers submitting 121 APA applications in 2019, compared to 203 in 2018. This decline is not surprising, as APMA has significantly increased user fees for companies applying for a PAA from 2018. The total number of completed APAs increased from 107 to 120 and the median completion period decreased slightly from 40.2 months to 38.8 months. Although the inclusion of a subject in the APP program has not been defined at the pre-file stage, the number of pre-file meetings held over a period of time may provide an interim forecast for the inventory of future years. It can also be used to measure current interest in the rating agency`s APP program. In 2019, the rating agency held a total of 15 pre-wire meetings. The rating agency`s APP program covers a wide range of industrial sectors. In 2019, more than two-thirds of open APA cases involved tax payers with activities in the following sectors: automotive equipment and other transportation equipment; computers and electronics; Health metals and minerals; technical, scientific and professional services; Retail Art and entertainment. Other sectors covered are the chemical industry and the allied industry; Food and drink; oil; Wholesale trade Construction equipment and equipment; Agriculture; Machines; real estate, leasing and leasing; and utility companies. If a critical assumption has not been met and the parties are unable to agree on how to revise the APA, the APA may be terminated.
In 2019, the IRS did not cancel APA for the failure of a critical hypothesis (or for some other reason). Where relevant authorities` procedures are available in the other countries concerned (as part of an applicable tax treaty), the IRS favours bilateral or even multilateral APAs. These agreements are also binding on the foreign tax administration for the same period and help to avoid cases of double taxation. In March 2019, the OECD Forum on Tax Administration (FTA) agreed to continue the tax security programme.