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The Central Board of Direct Taxes (CBDT) has entered into two unilateral advance pricing agreements (APAs) with Indian taxpayers on Thursday. Both the agreements also have a roll-back provision in them.
The two APAs signed on Thursday pertain to information technology and banking and finance sectors of the economy.
The international transactions covered in the agreements include software development services, IT enabled services and KPO services, an official release said.
With these two agreements, the total number of APAs entered into by the CBDT has reached 154. This includes 11 bilateral APAs and 143 unilateral APAs.
An APA is an agreement between a corporate taxpayer and the tax authority on its transfer pricing methodology and the tax rate applicable on inter-company transactions. It helps avoid disputes with tax authorities over transfer pricing.
The APA scheme, which was introduced in 2012, tries to provide certainty to taxpayers in transfer pricing by specifying the method of pricing and setting the prices of international transactions in advance.
Srivats.kr@thehindu.co.in
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