Where relevant authorities` procedures are available in the other countries concerned (as part of an applicable tax treaty), the IRS favours bilateral or even multilateral APAs. These agreements are also binding on the foreign tax administration for the same period and help to avoid cases of double taxation. The number of APA applications has decreased, with taxpayers submitting 121 APA applications in 2019, compared to 203 in 2018. This decline is not surprising, as APMA has significantly increased user fees for companies applying for a PAA from 2018. The total number of completed APAs increased from 107 to 120 and the median completion period decreased slightly from 40.2 months to 38.8 months. From the inception of the APA program in 1991 until December 31, 2019, the IRS received a total of 2,670 APP applications and executed 1,940 APAs. In the table below, you will find summary statistics on APP applications for 2019, exported APAs and pending AAPs. Data are reported separately for unilateral and bilateral APAs and completion times for 2019, 2018 and 2017 are compared. In March 2019, the OECD Forum on Tax Administration (FTA) agreed to continue the tax security programme.
In particular, by identifying improvements to be made, the APA is an agreement between the IRS and a subject under which the IRS agrees not to object to an adjustment of transfer pricing under Section 482 of the IRC for one or more covered transactions when the subject files his tax return for a covered year on the basis of the agreed TPM. The APP process is a voluntary program of principle settlement and cooperation of real or potential transfer pricing disputes as an alternative to the traditional review procedure. Although India did not account for a significant share of the agreements reached in 2019, a proportional number of Indian cases were filed, due to progress in relations between the IRS and Indian tax authorities in recent years. In 2019, India accounted for 12% of bilateral APAs (more than any other country except Japan) and 21% of pending bilateral APAs (the second largest proportion after Japan).