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APA procedure in practice


by Joanna Tomczak

17 August 2020


An Advance Pricing Agreement (APA) is concluded between a tax authority (or authorities – in the case of bilateral or multilateral APAs) and the taxpayer applying for the APA. Our experience as regards the APA procedure shows that the Ministry of Finance is open to discussion, explanations and meetings, as well as to finding solutions satisfactory to both parties.


The APA procedure is as follows:


  • arranging a preliminary meeting with representatives of the Ministry of Finance;
  • filing of the application for APA and payment of the application fee;
  • formal review of the application for APA and request to complete the missing data and information (if any);
  • review of the transaction’s homogeneity to check if the APA application fee is sufficient;
  • subject-matter review of the APA application.


As part of the above stages the Ministry of Finance sends requests for explanations or additional information. At each stage of the process a meeting with the representatives of the Ministry of Finance may be arranged (also in the form of a teleconference) to discuss the scope of the request or the required documents.


Preliminary meeting

It is worth arranging the preliminary meeting with the representatives, i.e. with the Key Accounts Department of the Ministry of Finance, even before filing the APA application. To do it, the taxpayer must prepare a short presentation about his business and the key assumptions of his application, as well as formulate specific questions which can be reviewed by the department representatives before the meeting. Please be aware that the aim of the preliminary meeting is only to clear doubts related to filing the application, the application elements or to explain APA regulations. Other information, i.e. the amount of the fee or the division of homogeneous transactions, is provided by the representatives of the Key Account Department for guidance only and is not binding. The authorities perform a detailed review only after the APA application is filed. However, during the meeting you can obtain information on the initial approach of the tax authorities to the presented facts and circumstances or the potential risks. Such knowledge is helpful when drafting the application, calculating the fee and reaching a decision to file the application.


Review of transaction homogeneity and determination of the fee amount

At one of the stages of the review of the APA application, performed after the formal review of the mandatory APA application elements, the Ministry of Finance determines the APA application fee and, consequently, divides the transactions covered by the application into homogeneous transactions. The APA application fee depends on the number of such transactions. Practice shows that the Ministry of Finance groups the transactions in quite a detail and focuses on the scope of the services and the individual features of service performance. However, it needs to be emphasised that the ministry's representatives are open to the taxpayer’s explanations as to his approach to the transaction grouping. In the next step, the taxpayer may refer to the division suggested by the authorities. Nonetheless, before applying for APA, the application fee should be assessed under the assumption that the representatives of the Ministry of Finance will perform a detailed division of the transactions into homogeneous ones.


APA application deadlines

Considering the current situation on the market and the state of pandemic, the consideration of APA applications by the Ministry of Finance takes longer than provided for in the law. If the time limit is extended, the Ministry of Finance each time notifies the taxpayer about it in writing. You should bear that in mind when applying for APA.


The APA procedure is not one-sided – it is preceded by numerous meetings and Q&A sessions with the taxpayer, who can address the concerns of the tax authorities and better justify his division of transactions and the selected fee calculation method. The authorities of the Ministry of Finance are open to co-operation and the entire process has a form of a dialogue.


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Joanna Tomczak

Tax adviser (Poland)

Senior Associate

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