India inks 62 advance pricing agreements
Premium- With this, the total number of advance pricing agreements since the inception of the programme has gone up to 42
The Central Board of Direct Taxes (CBDT) entered into 62 advance pricing agreements (APA) in FY22 with Indian taxpayers, comprising 13 bilateral APAs - consequent to mutual agreements between India and its treaty partners - and 49 unilateral APAs.
With this, the total number of APAs since the inception of the APA programme has gone up to 421. APAs provide certainty to taxpayers in transfer pricing by specifying the methods of pricing and determining the arm’s length price of international transactions in advance for five years.
“Despite severe economic and social disruption caused by the CoVID-19 pandemic in first part of the financial year, the number of APAs signed compares very well with the APAs signed in the preceding two years (31 APAs in FY 2020-21 and 57 APAs in FY 2019-20)," the Board said on Thursday.
Further, the taxpayer has the option to roll back the APA for four preceding years, as a result of which nine years of tax certainty is provided.
The progress of the APA scheme strengthens the government’s resolve to foster a non-adversarial tax regime and increase the ease of doing business in India, the Board said.
Experts said that the progress of the APA regime was encouraging for foreign companies given the economic and social disruption caused by the pandemic.
“The APA programme has been welcomed by all stake holders as it appreciates the business realities and has been able to reduce cases of litigation, ensuring a win-win situation for the department as well as taxpayers," said Amit Agarwal, partner- transfer pricing at Nangia Andersen LLP.
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