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Bilateral Advance Pricing Agreement

Bilateral Advance Pricing Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Bilateral Advance Pricing Agreement

"I need a Bilateral Advance Pricing Agreement for my UAE-based technology company's software licensing transactions with our German subsidiary, to be effective from January 2025, using the Comparable Uncontrolled Price method."

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Document background
The Bilateral Advance Pricing Agreement (BAPA) serves as a crucial instrument in the UAE's transfer pricing framework, introduced under the Corporate Tax Law and supporting regulations. This document is essential for multinational enterprises seeking certainty in their transfer pricing arrangements, particularly following the UAE's implementation of comprehensive transfer pricing rules in 2023. The agreement is used when a company conducts significant cross-border transactions with related parties and wishes to prevent potential double taxation issues. It provides advance certainty on the transfer pricing methodology, helping companies comply with both UAE and foreign tax jurisdiction requirements. The document typically covers a 3-5 year period and includes detailed technical analysis, critical assumptions, and annual compliance obligations, aligned with OECD guidelines and UAE tax regulations.
Suggested Sections

1. Parties: Identification of the taxpayer and the tax authorities of both jurisdictions

2. Background: Context of the agreement, including brief description of the business operations and reason for seeking the APA

3. Definitions: Key terms used in the agreement, including technical transfer pricing terminology

4. Scope of Agreement: Covered transactions, time period, and entities involved

5. Transfer Pricing Methodology: Agreed method(s) for determining arm's length prices/margins

6. Critical Assumptions: Key business and economic conditions underlying the agreement

7. Annual Compliance Requirements: Documentation and reporting obligations of the taxpayer

8. Term and Renewal: Duration of the agreement and process for renewal

9. Revision and Cancellation: Circumstances and procedures for modifying or terminating the agreement

10. Confidentiality: Provisions regarding the handling of sensitive information

11. Governing Law and Jurisdiction: Applicable laws and jurisdiction for dispute resolution

12. Execution: Signature blocks for all parties

Optional Sections

1. Rollback Provisions: Optional section for applying the agreed methodology to previous tax years

2. Compensating Adjustments: Procedures for making adjustments if results fall outside agreed ranges

3. MAP Integration: Integration with Mutual Agreement Procedure if applicable

4. Force Majeure: Provisions for extraordinary events affecting the agreement's implementation

5. Language: Required when agreement is executed in multiple languages

6. Additional Tax Authority Requirements: Specific requirements unique to either tax authority

Suggested Schedules

1. Schedule A - Covered Transactions: Detailed description of intercompany transactions covered by the APA

2. Schedule B - Transfer Pricing Methodology: Detailed technical explanation of the agreed pricing method(s) and calculations

3. Schedule C - Critical Assumptions: Comprehensive list and explanation of critical assumptions

4. Schedule D - Annual Reporting Template: Format and content requirements for annual compliance reports

5. Appendix 1 - Financial Data: Historical financial data and projections supporting the methodology

6. Appendix 2 - Functional Analysis: Detailed analysis of functions, assets, and risks of involved entities

7. Appendix 3 - Comparability Analysis: Details of comparable transactions or companies used in the analysis

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Arm's Length Principle
Advance Pricing Agreement
APA Term
Associated Enterprise
Covered Transaction(s)
Competent Authority
Critical Assumptions
Comparable Uncontrolled Price
Controlled Transaction
Effective Date
Federal Tax Authority
Foreign Tax Authority
Group
Interquartile Range
Local File
Master File
Operating Margin
OECD Guidelines
Profit Level Indicator
Related Party
Reference Period
Renewal Period
Tested Party
Testing Period
Transfer Pricing Method
Transfer Pricing Documentation
Threshold Amount
UAE Corporate Tax Law
Ultimate Parent Entity
Clauses
Scope and Purpose
Duration and Term
Transfer Pricing Methodology
Critical Assumptions
Documentation Requirements
Compliance Obligations
Confidentiality
Representations and Warranties
Termination
Amendment and Modification
Dispute Resolution
Force Majeure
Governing Law
Reporting Requirements
Review and Monitoring
Renewal
Information Exchange
Data Protection
Notices
Entire Agreement
Severability
Assignment
Language
Annual Compliance
Records Retention
Tax Authority Access Rights
Compensating Adjustments
Implementation
Binding Effect
Signature and Execution
Relevant Industries

Manufacturing

Technology

Financial Services

Pharmaceuticals

Automotive

Consumer Goods

Energy and Resources

Telecommunications

Professional Services

Real Estate and Construction

Relevant Teams

Tax

Finance

Legal

Treasury

International Operations

Corporate Affairs

Compliance

Financial Planning and Analysis

Risk Management

Transfer Pricing

Relevant Roles

Chief Financial Officer

Tax Director

Transfer Pricing Manager

International Tax Manager

Group Financial Controller

Head of Tax

Finance Director

Tax Compliance Manager

Senior Tax Analyst

Corporate Controller

General Counsel

Finance Manager

Industries
UAE Federal Decree-Law No. 47 of 2022: The UAE Corporate Tax Law which established the foundation for corporate taxation and transfer pricing requirements in the UAE
UAE Cabinet Decision No. 108 of 2023: Specific transfer pricing regulations including documentation requirements, methods, and procedures for advance pricing arrangements
OECD Transfer Pricing Guidelines 2022: International guidelines for transfer pricing which the UAE follows, particularly regarding methods and comparability analysis
Federal Decree-Law No. 28 of 2021: UAE's Tax Procedures Law governing administrative aspects of tax matters including procedures for agreements and appeals
Ministerial Decision No. 265 of 2023: Detailed guidance on transfer pricing documentation requirements and implementation of transfer pricing rules
UAE Double Tax Treaties: Relevant bilateral tax treaties between UAE and the other contracting state (specific treaty depends on the other country involved in the BAPA)
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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