Passing the ADIT can be a challenge. We discussed general principles of exam preparation in a separate blog post, but with the exam date quickly approaching, it is a good time to consider principles of the successful exam sitting.
1. Build your technical knowledge and ensure you have the necessary practical skills
It is impossible to pass the exam without having solid technical knowledge and practical problem-solving skills. To pass the exam, you have to start well in advance and follow your learning system to cover all syllabus items and build the wide range of skills and expertise. Check our blog post on preparing for the exam here.
In StarTax Education, we developed an extensive preparation course for Transfer Pricing 3.03 exam, which includes lectures, quizzes, practical problems, mock exam, and the textbook. Check it out if you are only starting your preparation!
If you feel that you are not prepared well, and your chances of passing the exam are low, consider rescheduling it. CIOT allows deferring your exam entry for up to one year. This means that you can move your booking so that your exam takes place in your choice of session during the next twelve months: either June or December.
You can request to defer your exam entry until 48 hours before your exam start time. Check the CIOT website for more details.
2. Prepare your computer and install the Exam4 software
It is critically important to ensure that your PC is fully operational and the necessary software is installed before the exam session. CIOT did a great job by putting together all the essential guidance and checklists to help you with this. From our experience, it is crucial to start your PC at least an hour or two before the exam, as there is a chance that Windows will decide to update itself (surprise!).
Check these links for more guidance:
Check these links for more guidance:
3. Develop a strategy
By the time you have to sit the exam, you should already have a good feeling about your strengths and weaknesses. You should develop your strategy depending on where you feel the most/the least comfortable.
ADIT exam gives flexibility in choosing problems in Parts B and C. You should choose problems that are the easiest for you. For example, when sitting the TP exam, I knew I am not going to take the “court cases” question, as it will take too much time to answer (and it is difficult to remember all of the details of every court case). When sitting the Principles of International Taxation, I (obviously) selected problems connected with transfer pricing whenever possible.
Another essential thing to do is to dedicate time to every selected problem of the exam. By this, you will ensure you maximize your points. It is better to solve two problems with 50-70% result (instead of spending time on one question in an attempt to achieve maximum).
You also should consider the order of answering the questions. You don’t want to bump into the most challenging question and spend all of your time trying to crack it. The general recommendation is to start with your “best” question. Anyway, time management and layer technique can help you overcome the issue and maximize your points.
4. Time management
Time management is essential for a successful exam sitting. I know a lot of good candidates who simply failed the ADIT exam due to the lack of control over time.
ADIT exams are tricky, as you can find answers to most of the questions in permitted texts. However, the truth is you will not have sufficient time to search for answers. You should know permitted texts and their structure very well, and use them only for short and concise references. You should be able to quickly navigate through the text to find relevant lists and guidance (when you are asked about features of low-value adding services, for example). But you will not have time to read the source. No way. (remember that the use of study materials other than permitted texts is not allowed).
Ensure you dedicate time to every problem of the exam. The time you spend should be proportionate to the number of points you can potentially get. For example:
- Part A, problem 1: 25 points, i.e. 45 minutes (25% of 3 hours)
- Part A, problem 2: 25 points, i.e. 45 minutes
- Part B problem: 20 points, i.e. 35 minutes
- Part C, problem 1: 15 points, i.e. 25 minutes
C, problem 2: 15 points, i.e. 25 minutes
You may also want to leave some time to review your answers before submitting.
5. Build your answers in layers
The approach that I find especially useful is to build answers in layers. For example, imagine a case problem where you need to identify controlled transactions and suggest applicable TP methodologies. What you can do is:
- Give a “minimum viable” answer – what this means is to answer questions without much additional details and explanations. For example, you just list transactions you identified, and you indicate and explain TP methods that seem to be the best for the case. Ideally, your “minimum viable” answer should take you only 50% of the time dedicated to the problem.
- Move to other problems and scenario questions and give “minimum viable” answers there.
- After you answered all of the questions,
you come back to problems that will give you the most points, and extend your
answers there. For example, when coming back to controlled transactions/TP
methods problem, you can add references to the OECD Guidelines, explain the general
logic of TP methods selection, extend your explanation of methods and reasons you
did not select other methods, make reference to transaction-specific guidance,
By using this approach, you ensure you answered every question, and you allocate your time and efforts in a way that will maximize your points.
What are your hints and tips for passing the exam? Please share them with us! We would love to discuss it in the international tax professionals community. Also, don't hesitate contacting other international tax practitioners - your colleagues are usually very friendly and eager to help.
And good luck with the exam!
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