Official Statistics on APAs and MAPs in the European Union

In March, the EU Joint Transfer Pricing Forum (“EUJTPF”) published statistics for Advance Pricing Agreements (“APAs”) in the EU at the end of 2019.  These statistics detail for 28 member states and the EU in total items such as the number of APAs in force, granted over the year, rejected applications and withdrawals, and the average time to negotiate an APA.  These cover unilateral- as well as multilateral APAs and provide for each state a breakdown according to APAs with EU-member states and non-EU states.  For example, the country with the most APAs in force at the end of 2019 was Belgium with a sum of 827.  However, the vast majority of these were unilateral APAs of which 517 related to transactions with EU member states and 281 with non-EU states.  The Belgian tax administration received over the year 774 APA requests and granted 713.  No APA request was rejected in 2019 and 5 withdrawn by the taxpayer.  Belgian bi- and multilateral APAs required on average 42 month for negotiation.

In our view and compared with similar statistics for previous years, the data shows that the importance of APAs as a means to mitigate TP risk continues to increase in Europe.  Taking the USA and Japan as a comparison, it can be concluded that this development will continue.