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  Home > Tax Information - Individuals/Businesses > Double Taxation Relief and Exchange of Information Arrangements > Advance Pricing Arrangement

Advance Pricing Arrangement

You may reach an agreement with the Inland Revenue Department in an Advance Pricing Arrangement (APA) on the application of the arm’s length principle to controlled transactions with overseas associated enterprises.    

Basic Features of APA


  • establishes the transfer pricing methodology;
  • covers a period of three to five years; and
  • requires annual reporting.

The Inland Revenue Department will only consider bilateral or multilateral APA applications.

Benefits of APA


  • provides greater certainty on the tax liability;
  • ensures a fair application of the arm’s length principle;
  • reduces the risk of double taxation; and
  • avoids the risk of audit and penalty.

The Inland Revenue Department does not charge a fee for the service but you need to consider whether the cost and effort of obtaining an APA is proportionate to the benefits obtained before committing to an APA.  When you request for an APA, you need to submit a properly developed and documented APA proposal and a case plan.

Who can Apply

Any Hong Kong resident enterprise or a non-resident enterprise with a permanent establishment in Hong Kong, chargeable to Hong Kong profits tax and having controlled transactions, may apply for an APA.

How to Apply

You should first seek a pre-filing meeting.  The pre-filing meeting should commence at least 6 months prior to the commencement date of the APA.  The request for a pre-filing meeting should be made in writing to:

Senior Assessor (Tax Treaty)
Tax Treaty Section
Inland Revenue Department
36/F, Revenue Tower
5 Gloucester Road, Wan Chai, Hong Kong

More Information

For more information, please refer to Departmental Interpretation and Practice Notes No. 48 - Advance Pricing Arrangement or contact the Inland Revenue Department at 2594 5435.


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