ATCAs and APAs

By Tolley in association with Robert Langston of Saffery Champness

The following Corporation Tax guidance note by Tolley in association with Robert Langston of Saffery Champness provides comprehensive and up to date tax information covering:

  • ATCAs and APAs
  • Advance Pricing Agreements (APA)
  • Advance thin capitalisation agreements (ATCAs)

Advance Pricing Agreements (APA)

UK companies can agree in advance with HMRC that their transfer pricing method is acceptable for a pre-determined period of time (typically between three and five years). Overseas tax authorities may offer similar advance pricing agreements.


HMRC guidance however, makes it clear that APAs are designed to assist taxpayers with 'complex' issues - generally only where there is significant doubt as to the manner in which the arm’s length principle should be applied or where there is difficulty in establishing a market comparable. For example, APAs will be given where:

  • transfer pricing issues are complex rather than straightforward ie where there is doubt as to how the arm’s length standard should be applied, and no comparables can be easily identified

More on Transfer pricing and profit fragmentation: