Advance Pricing Agreement

Overview

Advance Pricing Arrangement is an arrangement between MIRA and taxpayer and in some cases, associates of taxpayers regarding the appropriate transfer pricing methodology for a set of transactions, to mitigate transfer pricing related issues.

Advance Pricing Arrangements entered in to will prevail over any other provision in any tax law which stipulates any rule with regard to transactions with associates. Transfer prices agreed in the APA would be the arm’s length price prescribed for such transactions under the Income Tax Act.

Application for Advance Pricing Arrangement

The following conditions are required to be met in order to apply for an APA arrangement

  • The applicant must be a resident of the Maldives who has entered or intends to enter into an international transaction to which Section 68(b) of the Income Tax Act applies.
  • The applicant must be a non-resident of the Maldives carrying on business through its permanent establishment in the Maldives, who has entered or intends to enter into an international transaction to which Section

Benefits of the APA

  • APAs provide certainty and unanimity of the transfer pricing approach
  • APAs allow appropriate methods to be used for proposed transactions
  • Cost and time saving for taxpayer and tax administration in dealing with transfer pricing issues

The APA process

The APA process and further information will be available in Advance Pricing Regulation and APA Guide

Application for APA

To apply for Advance Pricing Arrangements, “Request for Pre-filing Consultation” (MIRA 921) form together with supporting documents shall be submitted to   [email protected].

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