The basic idea of an ABS is to increase the efficiency of tax administration by instructing taxpayers to submit to the tax authorities all relevant facts for proper transfer pricing analysis and to work towards mutual agreement. The APA reduces the compliance burden by giving taxpayers more certainty about their transfer pricing methods, promoting their problems, and allowing them to discuss and resolve in advance before tax authorities. Unilateral A.A. are unilateral instruments that address issues with bilateral implications. Bilateral A.A. provides greater tax certainty and deals with the overall scope of a business and is preferred to unilateral A.A., although unilateral A.A. is also useful in certain circumstances, such as.B. where they cover issues or transactions for which there is no applicable tax treaty, they have a limited advantage wherever tax administrations actively consider the type of transactions that are aligned. As mentioned earlier, it is preferable for taxpayers and tax administrations to avoid including a reduction in access to WFP in audit reports. Since the MAP has bilateral problems, it is inappropriate to have two parties (goods and tax administration) that do not embody a third party (alternative tax administration) in the final solution of a problem. 1. of all taxpayers may not understand the possible effects of double taxation and the indisputable fact that such an adjustment by the opposing tax administration could complicate the problem.
Secondly, tax administrations should take into account in the same way the problems of cooperation and reciprocity, since the indisputable fact that these unilateral regulations will not serve tax administrations well in the end. With regard to unilateral APA, where a foreign adjustment is made against a transaction or institution covered by a unilateral APA, the unilateral APA should be treated as the taxpayer`s request and should therefore be eligible for POPs and be adaptable, as opposed to an irreversible regime. As far as possible, an APA should be carried out on a bilateral or multilateral basis between the competent authorities under the thinning procedure of the treaty concerned. .