On March 23, 2021, the United States’ Advance Pricing and Mutual Agreement Program (“APMA Program”) released its 2020 annual report (“2020 Annual Report”) to the public concerning advance pricing agreements (“APAs”). COVID-19 has caused unprecedented disruptions  to taxpayers and tax administrations alike, but the 2020 Annual Report shows that the APMA Program remained highly productive in 2020. Last year taxpayers filed 121 APA requests—the same amount as in 2019. And in 2020, APMA executed 127 APAs—seven more than the prior year.

How Other Competent Authorities Fared

The 2020 Annual Report suggests that certain foreign competent authorities may have been more successful than others in overcoming COVID-19 disruptions. Japan seems to have had a very effective year in clearing its APA inventory, and was the counterpart in more than half, 52%, of the bilateral APAs executed in 2020. The Indian competent authority also seems to have had a great run in 2020. After years of registering as a top three counterpart country by the number of bilateral APA requests filed with the APMA Program, India has finally cracked the rankings of being a top counterpart country by the number of bilateral APAs executed with the APMA Program. [1] In fact, India came in second to Japan, and accounted for 11% of all of the APMA Program’s executed bilateral APAs. On the other hand, Mexico and Korea were no longer top ranking counterparts in executed Bilateral APAs in 2020, while their share of pending bilateral APAs remained stable.

Other Trends

The 2020 Annual Report also shows APAs being executed more efficiently. The median time to renew an APA sharply dropped from 38.4 months in 2019 to 29.6 months in 2020. However, the median time to execute a new APA increased slightly from 41.9 months in 2019 to 43.7 months in 2020. This slight increase may be attributable to an increase in 2020 in the proportion of executed APAs governing transactions involving the use of intangible property (“IP”). As the APMA Program states, APAs governing IP are among the most challenging in its inventory. And in 2020, nearly 25% of all executed APAs covered transactions involving the use of intangible property, which is a substantial jump from the approximately 20% of executed APAs involving IP in 2018 and 2019.

The increase in the proportion of IP APAs reinforces an overall trend that suggests increased complexity among the APAs that the APMA Program executes. For instance, APAs governing services transactions, which are sometimes also complex in nature, represented 17% of all APAs executed in 2020, an increase from  2018 and 2019, when services accounted for 6% and 11% of completed APAs, respectively.

One apparent countertrend to the increasing complexity of APA requests was that that only 3 multilateral APA requests were filed in 2020, a decrease from 8 in 2019 and 7 in 2018.  Nevertheless, prior to 2018 multilateral APA requests were quite rare, and the 3 multilateral requests received in 2020 is still a significant number by historic standards.


Despite COVID-19, taxpayers sought APAs and tax administrations executed them in amounts consistent with pre-pandemic levels. The focus on APAs during this unprecedented disruption shows how significant they are to the international tax community. Finally, the increased efficiency taxpayers experienced in renewing APAs and the completion of a significant number of APAs with multiple foreign competent authorities during 2020 (including, for the first time, a substantial number of bilateral APAs with India), suggests that APAs may be more attractive for taxpayers than ever before.

[1] During 2018 and 2019 the total number of executed Bilateral APAs entered between Indian competent authority and the APMA Program is unreported because the total amount executed in these years was less than the minimum threshold to separately report outside the “Other Countries” category.