Taxation (International and Other Provisions) Act 2010 section 224

Provision in agreement about years ended or begun before agreement made

Section 224 allows an advance pricing agreement (APA) to cover chargeable periods that predate the agreement itself, subject to a cut-off date, and gives effect to any tax adjustments specified in the agreement for those earlier periods.

• An APA may include provisions relating to chargeable periods that ended before the agreement was made, allowing retrospective coverage.
• However, an APA cannot reach back to cover any chargeable periods that ended before 27 July 1999 — this is the earliest permissible cut-off date.
• Where an APA covers a chargeable period that began or ended before the agreement was made and specifies how tax adjustments should be calculated, those adjustments must be made in accordance with the terms of the agreement.
• This provision ensures that businesses and HMRC can resolve transfer pricing matters for past periods through an APA, giving certainty and binding effect to the agreed method of adjustment.