The Central Board of Direct Taxes (CBDT) has entered into 11 more unilateral advance pricing agreements (APAs).
These APAs were signed with Indian subsidiaries of foreign companies operating in various segments of the economy like investment advisory services, engineering design services, marine products, contract Research & Development, software development services, IT enabled services and cargo handling support services.
With this round of signing, CBDT has so far entered into 31 APAs (30 unilateral and one bilateral).
An APA is an agreement between a taxpayer and the tax authority concerning the transfer pricing method and the rate applicable to the taxpayers’ inter-company transactions, and normally covers multiple years.
While seven of these APAs have rollback provisions contained in them, the other four agreements are for future five years, a CBDT release said. APAs with rollback provisions can cover a maximum period of nine years in total.
India had introduced the APA programme in 2012. As many as five APAs were concluded in the first year and four APAs got signed in the second year.
The pace of negotiations has picked up in the current year. This year has already witnessed the conclusion of 22 APAs.
The CBDT aims to finalise another 30 to 40 APAs before the end of this fiscal to provide stability and confidence to foreign enterprises operating in India.