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Advance Pricing Agreements in Europe: Overview of characteristics | Infographic

June 26, 2023
This article is also available in
CzechSlovakRomanian

An Advance Pricing Agreement (APA) is an agreement between a taxpayer and a tax administrator that aims to avoid any transfer pricing disputes, by determining the arm’s length price for a controlled transaction.

Our infographic on advance pricing agreements is a sum-up of characteristics of APA in Czech Republic, Hungary, Poland, Romania and Slovakia.


Availability and validity

CZECH REPUBLIC

Maximum initial duration
3 years

%

No possibility of extension, but after three years, the application can be submitted again

HUNGARY

Maximum initial duration
5 years

%
Possibility of extension if conditions remain unchanged
8 years

%

POLAND

Maximum initial duration
5 years

%
Possibility of extension if conditions remain unchanged
10 years

%

ROMANIA

Maximum initial duration
5 years

%

Extension is possible in case of long term contracts; the legislation does not provide an effective maximum period

SLOVAKIA

Maximum initial duration
5 years

%
Possibility of extension if conditions remain unchanged
10 years

%

Fees for APA

CZECH REPUBLIC

Administrative fee – CZK 10,000 (approx. EUR 420)

The amount of the fee depends on the number of transactions assessed, or on the number of permanent establishments; regardless of whether it is a unilateral, bilateral or multilateral APA.


HUNGARY

Depending on the number of jurisdictions taking part in the APA, filing fees vary as follows:

Unilateral APA – HUF 5,000,000 (approx. EUR 13,000)

Bilateral APA – HUF 8,000,000 (approx. EUR 21,000)

Multilateral APA – HUF 8,000,000 (approx. EUR 21,000)

In the case of proceedings for APA extension or modification, the fee is 50 percent of the fee paid in the original procedure. If the APA request is rejected or withdrawn, the HTA returns 85 percent of the fee already paid pertaining to the APA procedure. The pre-filing consultation is subject to an administrative fee. The fee for a pre-filing consultation is HUF500,000 (approx. USD1,780) per each consultation.


POLAND

1% of the value of the transaction that is the object of the agreement. However, in the case of:

Unilateral APA:

  • concerning domestic entities – min. PLN 5,000 (approx. EUR 1,100) and max. PLN 50,000 (approx. EUR 10,900)
  • concerning foreign entity – min. PLN 20,000 (approx. EUR 4,400) and max. PLN 100,000 (approx. EUR 21,700)

Bilateral or multilateral APA – min. PLN 50,000 (approx. EUR 10,900) and max. 200,000 PLN (approx. EUR 43,500)

Renewal fees are half of the amount of the fee for the renewed APA.


ROMANIA

For large taxpayers and other taxpayers with consolidated value of transactions higher than EUR 4,000,000:

  • EUR 20,000 for the initial APA
  • EUR 15,000 for amending the initial APA

For other taxpayers and consolidated value of transactions lower than EUR 4,000,000:

  • EUR 10,000 for the initial APA
    EUR 6,000 for amending the initial APA

SLOVAKIA

Unilateral APA – EUR 10,000*

Bilateral and multilateral APA – EUR 30,000

*half amount applies to the taxpayer with the index of tax reliability „high


Common aspects

Application responsibility: The tax administrator issues the APA on the basis of an application filed by the taxpayer. In other words, the tax administrator cannot issue the APA “ex officio”.
Language options: The application for the APA, to which the TPD shall be enclosed, too, must be filed in local language only*.

*except Hungary (where English, French, and German languages are also accepted) and Slovakia (where TPD might be accepted also in other language , however the tax authority might additionally request for the TPD submission also in Slovak language)

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