Using Bilateral Advance Pricing Agreements to Resolve Tax Transfer Pricing Disputes

  title={Using Bilateral Advance Pricing Agreements to Resolve Tax Transfer Pricing Disputes},
  author={A. De Waegenaere and R. Sansing and J. Wielhouwer},
  journal={Tax Law: International \& Comparative Tax eJournal},
We investigate the use of bilateral advance pricing agreements (BAPAs) to resolve transfer pricing disputes between a taxpayer and two tax authorities. BAPAs are designed to protect firms from double taxation while reducing expected compliance costs. We identify settings in which we expect BAPAs to arise and investigate the effect of the program on compliance costs. We show that agreements are more likely to arise when the amount of income potentially subject to double taxation is low and the… Expand
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