On 28 September 2022 OECD published a new manual for entering bilateral advance pricing arrangement (APA’s) which has been approved by the Inclusive Framework on BEPS, as well as all members of the FTA, on 6 July 2022. The Bilateral Advance Pricing Arrangement Manual (“BAPAM” or “Manual”) is intended as a guide to tax administrations and taxpayers for streamlining the bilateral APA process. In addition to detailing several Best Practices for engaging in bilateral APAs, it also includes practical resources for tax administrations and taxpayers, such as templates and examples. It provides tax administrations and taxpayers with basic information on the operation of bilateral APAs (“BAPAs”) and identifies best practices for BAPAs without imposing a set of binding rules upon jurisdictions. The best practices identified in the Manual aim to streamline the BAPA process through: Mitigating delays created by differences in the BAPA processes in each jurisdiction, where possible. Avoiding information asymmetries between competent authorities by ensuring they have access to the same information, in the same form and at the same time. Increasing transparency between competent authorities and taxpayers throughout the BAPA process. Ensuring that there are realistic expectations for competent authorities and taxpayers at each stage of the BAPA process as to the resources required and the expected timeframes to come to an agreement. The Manual does not modify, restrict or expand any rights or obligations contained in the provision of any tax convention, the OECD MTC, or the OECD TPG. To the extent any content in the Manual appear to conflict with a tax treaty, the OECD Model Tax Convention, its Commentary, the OECD Transfer Pricing Guidelines or the Action 14 Final Report, the latter document or guidance is controlling. “Best practice” is the term used in this Manual to describe what is generally thought to be the most appropriate manner to deal with a BAPA process or procedural issue. The best practices contained in the Manual are based on those best practices already undertaken by jurisdictions or put forward by taxpayers and jurisdictions as part of a consultation process rather than being developed from a unified single BAPA programme. Although taxpayers and tax administrations should ideally strive towards implementing these best practices, it is recognised that it may not always be possible to apply a best practice as described in the Manual or there may be situations where their application may not be appropriate ...

It is important to distinguish the different types of APAs and so the bilateral or multilateral APAs, which are the main subject of this annex, are hereafter referred to as “MAP APAs”. The APAs that do not involve a mutual agreement negotiation are referred to as “unilateral APAs”. The generic term “APA” is used where the feature to be discussed applies to both types of APA. It should be noted that, in the vast majority of cases a bilateral APA will be concluded under the mutual agreement procedure of a double tax convention. However, in some cases where a bilateral APA has been sought and the treaty is not appropriate, or where a treaty is not applicable, the competent authorities of some countries may nevertheless conclude an arrangement using the executive power conferred on the heads of tax authorities. The term MAP APA should be interpreted, with the necessary adaptations, as including such exceptional agreements ...