Taxation (International and Other Provisions) Act 2010 section 220

Effect of agreement on party to it

Section 220 explains how an advance pricing agreement (APA) overrides the normal tax rules for the person who has entered into the agreement with HMRC, and sets out the limits of that override.

• For any chargeable period covered by an APA, the tax legislation is applied as if the matters dealt with in the agreement are determined according to the agreement rather than under normal tax rules.
• The agreement only overrides the normal rules to the extent that it specifically provides for a particular question to be determined in that way — it does not create a blanket override of all tax provisions.
• Where the question relates solely to transfer pricing matters (the allocation of profits or the attribution of income to a permanent establishment), the APA can only disapply the transfer pricing rules in Part 4 of the Act — it cannot override other statutory provisions.
• The override effect of an APA is also subject to the rules on revocation of agreements and breach of conditions set out in section 221.