As a general rule, pre-price agreements should be concluded within 180 days of the notification filing date. But this term is often ignored. A Pre-Pricing Agreement (APA) is a procedural agreement between one or more tax payers and one or more tax authorities, which aims to avoid transfer pricing disputes by pre-defining a set of criteria for certain cross-border controlled transactions within a specified time frame, to ensure that they respect the length-of-arm principle. An ex ante tax application may be made by companies established in Italy that are subject to the transfer pricing rules covered by Article 110, paragraph 7, of the income tax code and by Italian stable institutions. The request includes determining the price of arm length for intercompany transactions. However, the potential scope of a pre-price agreement is flexible – it can relate to all business transfer pricing issues or be limited to certain issues. “Gli approfondimenti effettuati da Confcommercio Imprese per l`Italia, circa l`applicazione degli advance pricing agreements nel nostro paese, hanno evidenziato una situazione variegata, che merita di essere portata all`attenzione degli associati ella della pubblica opinione. In nome del pluralismo distributivo, Federcomated sostiene la necessité che tutte le aziende attive sul territorio nazionale operino sulla base delle medesime regole, condizioni e opportunit” Mario Verduci, Segretario generale Federcomated A standard pre-price agreement procedure includes one or more meetings with tax authorities, which are also bilateral and multilateral APAs in general, bilateral or multilateral, i.e. they also conclude agreements between the taxpayer and one or more foreign tax administrations under the authority of the mutual agreement under the Corporate Tax Contracts (POPs).  The subject benefits from such agreements, since he is assured that income from covered transactions is not subject to double taxation on the part of the IRS and the relevant foreign tax authorities. The IRS policy is to “encourage” taxpayers to apply for bilateral or multilateral APA where there are provisions of the competent authority.
An international judgment on transfer pricing is essentially a one-sided pre-price agreement.