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End of attention
We have also been looking at the APA program through four focus areas of compliance:
- transparent relationships
- best practice process and governance
- people and culture.
As we end our transition year to modified APA procedures, we notice that compliance outcomes indicators generally show:
- some growth in the size of the program, particularly for situations where we have raised potential transfer pricing problems with taxpayers
- overall, once in the program, taxpayers' financial and tax performance tends to rise
- the value of the program's coverage of international related party dealings remains steady, which is helped by the routine renewal of expiring APAs
- completion times are favourable in the context of similar programs conducted by peer tax administrations.
We have increased the transparency of the program by issuing our PS LA 2011/1 ATO's Advance pricing arrangement program, which describes our revised processes, including:
- arrangements for simplified and more complex cases
- ways for dealing with collateral issues to the covered dealings of the APA.
The introduction of a circuit breaker/review mechanism for stalled cases provides an opportunity to directly address relationship problems.
The PSLA 2011/1 ATO's Advance Pricing Arrangement Program also serves to embed best practice. The process steps we use have also been incorporated into revisions to the case management support systems used by APA teams.
Managing an APA program of our size with such diverse and complex related party dealings APAs is always challenging. With more staff members undertaking APA work and sustained pressure on expert staff, we are continuing to invest heavily in staff training. This is directed beyond the procedural and technical aspects of the work to include an emphasis on the desired behavioural features we are looking to have the parties bring to an APA and which our revised processes seek to express.
The implementation of our new APA practice statement has our processes more transparent and the evaluation of APA application is now more predictable. The changes we have made provide clear procedural steps that are underpinned by agreed and meaningful case plans.
We are also able to offer a variety of APA products that better match the facts, circumstances and complexity of the applicants' international related party dealings.
With a substantial pipeline of work in progress, we anticipate continued strong interest in the APA program.