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April 1, 2024

APA report for 2023 shows number of APAs executed more than doubled

Executive summary

The IRS Advance Pricing and Mutual Agreement Program (APMA) issued the 25th annual Advance Pricing Agreement (APA) report (the Report) on March 30, 2024, in Announcement 2024-16. The Report discusses APMA, including its activities and structure for calendar year 2023, and gives useful insights into its operation.

The total number of APAs executed increased significantly from 77 to 156 and the median amount of time to finalize an APA decreased from 43.4 months in 2022 to 42 months in 2023. However, the number of APA filings slightly decreased in 2023, with taxpayers filing 167 APA requests (down from 183 in 2022).1


  • After executing a historically low number of APAs in 2022 (77), the fewest executed in any year since 2011, the number of APAs executed more than doubled in 2023 (156), setting a record for the most APAs executed in a single year.
  • For the third year in a row, APMA received more APAs than it executed. During 2023, 167 APA applications were filed and 156 APAs were executed. Thirteen APA applications were withdrawn, and the inventory of pending APAs slightly decreased in 2023.
  • At year end, 558 APA requests were pending (480 bilateral, 34 multilateral and 44 unilateral), down from 564 in 2022.
  • The median time required to complete an APA decreased from 43.4 months in 2022 to 42 months in 2023.
  • Overall, the APMA headcount for those working on APAs increased to 115 professionals (including the Director) as of December 31, 2023 (from 98 at the end of 2022).
  • Details are provided on the treaty partners to bilateral APAs executed during the year. APAs with Japan (32%), India (17%) and Italy (11%) comprised approximately 60% of all US bilateral APAs executed in 2023. This is the first year since at least 2013 where Canada was not one of the top three treaty partners with which the IRS executed the most APAs.
  • There has been a continued interest in bilateral APAs filed with Japan (30%), India (21%) and Canada (14%), representing 65% of all US bilateral APAs filed.
  • Approximately 56% of the APAs executed in 2023 were for transactions between foreign-parented companies and their US subsidiaries, while 37% were executed for transactions between US parent companies and their foreign subsidiaries.
  • The Comparable Profits Method/Transactional Net Margin Method (CPM/TNMM) was applied in 86% of the APAs with intercompany services transactions. The most commonly selected profit level indicator (PLI) with the CPM/TNMM was the operating margin (OM) and operating profit to operating expense, which was used 48% of the time.
  • The CPM/TNMM continues to be the most commonly applied method (80%) in cases involving transfers of tangible and intangible property. The OM was once again the PLI most commonly applied, being used in 60% of cases. This represents a drop, however, in the use of the OM from 73% of the CPM/TNMM cases in 2022.

APA applications, executed APAs and pending APAs

Since the APA Program's inception in 1991 through December 31, 2023, the IRS has received a total of 3,286 APA applications and executed 2,424 APAs. The following table reports summary statistics about 2023 APA applications, executed APAs and pending APAs. Data are reported separately for unilateral and bilateral APAs, and completion times for 2023, 2022 and 2021 are compared.















APA applications










APAs executed










Renewals executed










Pending requests for APAs










Pending requests for renewals










APAs canceled or revoked










APAs withdrawn










* In some cases, the totals include additional multilateral cases

IRS staffing changes and operating efficiencies

The total number of APMA employees working on APAs increased during 2023. The number of economists increased in 2023 (29) compared to 2022 (26); the number of team leaders (a mix of lawyers and accountants) also increased in 2023 (70) from 2022 (59). There were 12 managers and three assistant directors in 2023. Each assistant director supervised four managers who lead teams comprised of both team leaders and economists. The IRS APMA contacts are listed here.

Months to complete APAs

The following data indicate that the average time to completion for new bilateral APAs decreased from 53 months in 2022 to 50 months in 2023. The average time to completion for renewal of bilateral APAs remained approximately the same as the previous year (36.6 in 2022 and 36.1 months in 2023). The average time to completion for renewal of unilateral APAs increased from 22.9 months in 2022 to 30.2 months in 2023; no new unilateral APAs were executed in 2022, but the average time to completion for new unilateral APAs nearly doubled in 2023 (45.2 months) compared to 2021 (24.5 months).


Bilateral (New)

Bilateral (Renewal)

Bilateral (Combined)











Average months











Unilateral (New)

Unilateral (Renewal)

Unilateral (Combined)











Average months










Treaty partners in bilateral APAs

As shown in the following chart, there are more APAs with Japan than any other country at 32% of bilateral APAs executed in 2023. This is attributable to the maturity of the APA programs in the United States and Japan, as well as the negotiating experience of the APMA team and the competent authority team representing the National Tax Administration of Japan.

India is the second most frequently involved treaty partner in executed APAs in 2023 at 17%. This demonstrates that the relationship between the IRS and India’s tax authority continues the improvement seen during the last several years. In addition, the number of India APA requests filed continues to increase steadily. In 2023, India represented 21% of bilateral APAs filed, 23% of pending bilateral APAs and 17% of executed bilateral APAs (second only to Japan for filed bilateral APAs, pending bilateral APAs and executed bilateral APAs). This constitutes a positive outcome given the uncertainty and severe risk of double taxation faced by multinationals investing in India.

Bilateral APAs filed per country2

Bilateral APAs executed by country

Industries covered

As shown in the following chart, manufacturing and wholesale/retail trade continue to comprise the largest share of APA cases, representing 61% of all APAs completed in 2023. This is a decrease from the previous year, where 82% of all APAs executed were in manufacturing or wholesale/retail trade and is due to an increase in the number of services and finance, insurance and real estate APAs completed.

Industry representation

Approximately 67% of manufacturing cases involved chemicals, transportation equipment, and computer and electronic products, while the wholesale/retail trade cases were mostly wholesalers of durable goods (53%).


Wholesale/retail trade

Covered transactions and tested parties

The Report describes, in overall terms, the covered transactions and sets out the types of tested parties in each transaction. Note that one APA may cover more than one transaction and not every APA has a tested party.

Covered transactions

Types of tested parties

Critical assumptions

A critical assumption is a fact on which the taxpayer's transfer pricing method depends. APAs typically list critical assumptions that involve a particular mode of conducting business operations, a particular corporate or business structure, or a range of expected business volume.

In the Report, APMA replaced older versions of the model APA with an updated model APA. The model APA used by the IRS includes a standard critical assumption that there will be no material changes to the taxpayer's business or to its tax or financial accounting practices during the APA term.

A few bilateral cases have included critical assumptions tied to either the taxpayer's profitability in a certain year or over the term of the APA, or to the amount of non-covered transactions as a percentage of the taxpayer's revenue.

If a critical assumption has not been met, and the parties cannot agree on how to revise the APA, the APA can be canceled. The IRS did not cancel any APAs in 2023 relating to the failure of a critical assumption (or any other reason).


The APA Program's results contained in the Report for 2023 include the following:

  • The number of APA filings was 167, down from 183 in 2022.
  • APMA executed 156 APAs, up from 77 in 2022.
  • The median time to complete a new bilateral APA decreased to 50 months from 53 months in 2022.
  • The median time to complete a renewal of a unilateral APA increased from 22.9 months in 2022 to 25.2 months in 2023.
  • The median time to complete an APA (bilateral and unilateral) decreased to 42 months, compared to 43.4 months in 2022.

APMA's headcount for those working on APAs increased in 2023. Currently, in addition to its Director, APMA has 70 team leaders, 29 economists, 12 managers and 3 assistant directors — a total of 115 transfer pricing professionals. This is an overall headcount increase of 17%.


After reporting lower results for the 2022 year, APMA executed a record number of APAs (156) during 2023. APMA also reported a welcome decrease of three months in the length of time it takes to complete a new bilateral APA (50 months), although it still takes more than four years to complete a new bilateral APA.

In April 2023, the IRS's Large Business & International Division implemented a new two-stage review process for new APA requests for the purpose of identifying whether other alternative dispute resolution processes (International Compliance Assurance Program, joint audit, etc.) might be more appropriate for taxpayers requesting an APA (see Tax Alert 2023-0800). There was concern among taxpayers and tax practitioners that APMA intended to reject some APA requests. While APMA did not provide statistics as to the number of APA requests rejected, APMA accepted 167 APA requests, which is consistent with prior years. Thus, early fears that APMA would use the guidance to limit access to the APA program appear not to have come to fruition.

It is too early to tell whether the interim guidance is impacting the length of time it takes to complete an APA. Given the 50 months it takes to complete a new bilateral APA, that information may not be available for three or four years. The information included in the Report is valuable to taxpayers evaluating whether the APA process is appropriate for them. In this respect, transparency around the length of time needed to complete an APA on a per country basis would be immeasurably helpful.3 That information might also provide some evidence as to whether the notion that arbitration is working has credence even though the competent authorities are arbitrating extremely few cases.4

An interesting and welcome development over the past few years has been the role of APAs between Italy and the United States. Italy's role in the APA process has increased significantly over the years, with APAs requested and executed exceeding those of many other European countries — a tribute to the Italy-US mutual agreement relationship. Additionally, the relationships with Japan and India remain important, as nearly half of the pending APA requests involve those countries.

Consistent with the last few years, there continues to be interest in multilateral APAs, with six more requested in 2023. APMA now has 34 multilateral APAs in inventory — more than the number of multilateral APAs executed during the previous three decades of the APMA program (24). The increase in the number of multilateral APAs is a positive result and indicates that APAs continue to be an attractive way to manage and obtain transfer pricing certainty with an ever-changing global economy and tax landscape.

APMA has been rewriting Revenue Procedure 2015-41 (and its MAP corollary Revenue Procedure 2015-40) for some time. APMA has not suggested that there will be a comment period nor a flexible implementation period. As a result, taxpayers considering an APA may want to submit their request before new guidance is issued.

* * * * * * * * * *


1 The APMA Program also received 22 user fee filings that were not yet accompanied by a substantially complete APA application in accordance with the provisions of Section 3.03(b) of Revenue Procedure 2015-41.

2 The pie charts in this Tax Alert were published in Announcement 2024-16.

3 The OECD and tax authorities around the world have been implementing rules requiring more transparency from taxpayers (e.g., Master Files, Local Files, and Country-by-country reporting).

4 APAs are covered in the mandatory arbitration rules with some countries (see Tax Alert 2024-0637). In some cases, the competent authorities are limited to 48 months to reach an agreement through the normal mutual agreement procedure. Given the average time to complete an APA has been over 48 months for several years, it would be interesting to see whether completion time exceeds 48 months with countries with which the US has arbitration.

* * * * * * * * * *
Contact Information

For additional information concerning this Alert, please contact:

National Tax Department, International Tax and Transactions Services, Transfer Pricing

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

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