Advance Pricing and Contractual Relations Arrangement
An Advance Pricing and Contractual Relations Arrangement is an arrangement between a taxpayer and the Ministry of Finance, Tax Administration and the tax authorities of other countries in which related parties are resident or operate through an establishment.
Background information on the conclusion of advance pricing and contractual relations arrangement:
the conclusion possibility is prescribed by Article 14a of the Profit Tax Act
it is concluded for transactions between related parties before they began (the arrangement is concluded for a future tax period, while the transactions may be from previous periods), where an appropriate set of criteria such as methods, comparisons, appropriate adjustments or key assumptions regarding future events is determined in order to determine transfer prices for these transactions over a certain period of time
it is binding for the taxpayer and for the Ministry of Finance, Tax Administration during the period for which it was concluded
the method of conclusion, the content, the validity periods, and the amounts of the costs of concluding are prescribed by the Ordinance on the Procedure for Concluding an Advance Pricing Agreement (APA)
The APA initiative may be submitted by taxpayers to the following e-mail address: sporazum.tc@porezna-uprava.hr