Advance tax ruling

(ATR).

Advance tax rulings are sometimes also known as 'tax clearance', 'pre-clearance', 'non-statutory business clearance' or 'clearance'.

They are designed to enable the parties to a proposed transaction to obtain reassurance (before committing to the transaction) about its tax effects.

An advance tax ruling or clearance is a written confirmation by a tax authority of its interpretation of the tax law applying to a proposed transaction.

In relation to major transactions, the parties may make the obtaining of a favourable advance tax ruling a precondition to completing the transaction.

See also

• Transfer pricing
• Tax ruling
• Tax transparency initiative
• Base erosion and profit shifting
• Clearance