Peter Barnes Comments on Increasing Demand for APAs in Bloomberg

A global crackdown on tax avoidance, particularly in the area of transfer pricing, is fueling a rise in demand from multinationals for advance agreements with tax authorities to avoid costly and lengthy disputes.

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“People see very large transfer pricing adjustments or other tax adjustments, but a lot of them are transfer pricing, and they say, ‘I don’t want a multi-year issue hanging over my head,’” said Peter Barnes, of counsel at Caplin and Drysdale.

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Adding to corporate taxpayers’ concern about certainty is the uptick in tax administrations’ enforcement efforts on multinational companies’ transfer pricing positions.

“Governments are hiring more and more examiners so that they are reaching deeper and deeper into the taxpayer pool for audits,” Barnes said.

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