IRS 2025 APMA Report: Are APAs Still Worth It?

On March 30, the IRS released Announcement 2026-8, “Announcement and Report Concerning Advance Pricing Agreements” for calendar year 2025. The report provides a current view of how the APMA program is operating in practice, including APA filings, executed agreements, case-processing timelines, transfer pricing methodologies, jurisdictional trends, and procedural requirements.

The 2025 data shows continued taxpayer demand for APAs despite rising filing fees, fewer completed agreements, growing case inventories, and longer bilateral APA timelines. For multinational groups, the report reinforces that APAs continue to provide meaningful transfer pricing certainty and double-tax protection but pursuing or renewing an APA now requires more deliberate planning around timing, cost, jurisdictional considerations, and transaction selection.

Background

APAs are one of the primary mechanisms that a taxpayer can rely on for obtaining prospective agreement from the IRS on transfer pricing methodologies for covered cross-border transactions. An APA can reduce audit risk, mitigate exposure to double taxation (when it is bilateral), and achieve greater certainty for recurring intercompany transactions by establishing transfer pricing outcomes before disputes arise. In contrast, other competent authority programs, such as the mutual agreement procedure (MAP), generally are designed to resolve existing instances of double taxation or treaty-related disputes after they have been identified through audits, adjustments, or taxpayer filings.

Revenue Procedure 2015-41 provides procedures for operation of the APMA program. Generally, under these procedures, taxpayers can request pre-filing conferences with the IRS; submit unilateral, bilateral, or multilateral APA applications; provide detailed transfer pricing and economic analyses supporting the proposed methodology; participate in negotiations between the IRS and foreign competent authorities; and comply with annual reporting requirements demonstrating adherence to the agreed-upon terms. The procedures also address matters such as APA renewals, amendments, terminations, rollback requests to prior tax years, and the administration of critical assumptions that can affect the validity of an APA.

The IRS is required to provide an annual report on the APA program pursuant to Section 521(b) of Public Law 106-170, the Ticket to Work and Work Incentives Improvement Act of 1999. The IRS issues a model APA agreement for taxpayers to use. The current model agreement is included as Appendix 1 to the 2025 APMA report.

Taxpayers that entered an APA with the IRS have ongoing compliance obligations, including filing APA annual reports, maintaining APA records and supporting documentation, and confirming that assumptions relevant to the IRS-agreed upon APA remain satisfied throughout the APA term to avoid potential revision, cancelation, or revocation of the APA.

Highlights of the 2025 IRS APMA report

The report indicates that 178 APA applications were filed in 2025, up from 169 in 2024. This increase suggests that APAs continue to be viewed as an effective mechanism for obtaining transfer pricing certainty and reducing audit risk, despite increased filing fees. For requests filed after Jan. 1, 2024, the IRS increased filing fees for original APA requests from $113,500 to $121,600 and for renewal requests from $62,000 to $65,900.

In 2025, 110 APAs were executed, down from 142 in 2024. In addition, the average completion time for bilateral APAs increased from 45.9 months in 2024 to 50 months in 2025. In prior years, APA cases were handled by 126 personnel, including 76 team leaders and 35 economists. As of Dec. 31, 2025, staffing had declined to 108 personnel, consisting of 63 team leaders, 30 economists, 12 managers, and three assistant directors. These trends suggest a growing imbalance between taxpayer demand and APMA program capacity.

Renewals remained a large share of completed cases. The report states that renewals represented about 50% of APAs executed in 2025, compared with about 58% in 2024. Once a taxpayer, the IRS, and, in bilateral cases, the foreign competent authority have agreed on a pricing framework, renewals can be more efficient than starting over because the facts, method, and negotiation history already are better developed.

The jurisdictional mix also is notable. Bilateral APAs continued to dominate, and the report highlights a substantial increase in APAs involving Canada, along with a moderate increase in Japan-related APAs. For taxpayers operating in these jurisdictions, the bilateral process remains an important tool for coordinating outcomes and reducing the risk that an adjustment in one country will not be matched by relief in the other. It also is notable that nearly 21% of bilateral APAs were entered into with India.

In terms of transfer pricing methodologies, the report reflects continuity more than change. The comparable profits method/transactional net margin method remained the most frequently used transfer pricing method, and operating-margin-based profit level indicators continued to be common. That pattern is consistent with the types of recurring transactions that fit comfortably within the APA process: relatively stable fact patterns, identifiable tested parties, and available comparable-company data.

The practical lesson from the 2025 report is that APAs remain important, but they should be used selectively. A taxpayer with high-value intercompany transactions, meaningful double-tax exposure, or operations in a difficult controversy environment might find an APA well worth pursuing, even with a longer timeline and higher filing costs. Lower-risk transactions, however, might be adequately managed with robust transfer pricing documentation rather than an APA.

Looking ahead

The 2025 APMA report confirms that despite some of the implementation challenges of the current program and the high fees, APAs remain a valuable part of the transfer pricing tool kit. Multinational taxpayers should consult their advisers to evaluate their transfer pricing profile and determine whether they could benefit from entering into an APA.