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On 17 March 2011, we released new guidance for taxpayers, their advisers and our staff on new processes designed to allow the APA program to cope with the increasing demand for APAs and increasing complexity of transactions for which APAs are requested. It replaces our previous guidance, Taxation Ruling TR 95/23.
For a copy of the practice statement, refer to Law Administration Practice Statement PS LA 2011/1 ATO's Advance pricing arrangement program.
The new processes outlined in the practice statement will ensure that issues are identified upfront in the APA process and the approaches to resolving them agreed with the taxpayer to avoid surprises in the analysis phase of the APA. The statement of mutual expectations in this practice statement reflects an approach which promotes frank and open dialogue between us and the taxpayer and a joint commitment to develop an APA.
A key feature of the renewed program is to provide a differentiated program that better meets the increasing demand for APAs and the range of transactions for which APAs are being sought. We now have three APA products to deal with simple, standard and complex international related party dealings, as well as a streamlined APA renewal process.
The changes to the APA Program have been well received by Australian taxpayers, advisors, and our tax treaty partners and will ensure its sustainability into the future and its continued role in our international tax strategy.
The new APA processes in the practice statement are the result of extensive consultation and co-design with industry on the principles of the program. Following recommendations from an independent review commissioned by us, we worked closely with representatives from the accounting profession and the Corporate Tax Association to look at ways to improve the effectiveness and efficiency of the program.