07/12/2022 TP News,

China’s State Administration of Taxation has published the latest report on advance pricing arrangements (APAs). The 2021 Report on Advance Pricing Arrangements contains data pertaining to period between January 1, 2005, and December 31, 2021. The report states that the tax authority has signed a total of APAs as on December 31, 2021. This includes a total of 125 unilateral and 101 bilateral APAs.

In 2021, a total of nine unilateral APAs and 11 bilateral APAs were signed. Of the 11 bilateral APAs, eight APAs were signed with Asian countries (regions), two APAs were signed with North American countries, and the remaining one APA was signed with a European country.

Of the nine bilateral APAs signed in 2021, two were concluded within 24 months while the remaining nine took more than 24 months. Most of the APAs signed in 2021 still involve manufacturing industry, which demonstrates the role of taxation on serving the real economy. The data indicates that the transactional net margin method (TNMM) is the most commonly used transfer pricing method. The second most popular transfer pricing method is the cost plus method.

Source:https://transferpricingnews.com/chinas-tax-authority-releases-latest-apa-stats/