Do companies in China normally have Advanced Pricing Agreements (APA)?

It depends on the complexity of explaining the manner in which a company does its pricing. If many complex issues are involved, then perhaps a company will need to have an APA in place. It also depends on the respective local tax authorities-their expertise in this area. If the local authorities are not well verse in this area (which undoubtedly is highly specialized), then there is no point in spending time and effort to put together an APA.

*(An APA is an agreement between the tax authorities and the taxpayer, setting out the method of transfer pricing policy for controlled transactions over a fixed period of time.)