CBDT inks 2 unilateral APAs with taxpayers
The Central Board of Direct Taxes (CBDT) signed two unilateral Advance Pricing Agreements (APAs) with Indian taxpayers pertain to the Information Technology and automobile sectors.
The international transactions covered in these two agreements include software development services, IT enabled services (ITES), manufacturing and business support services.
With this, the total number of APAs signed by the CBDT has reached 117. This includes 110 Unilateral APAs and 7 bilateral APAs. In the current 2016-17 financial year, total of 53 APAs (4 bilateral and 49 unilateral) were signed.
About Advance Pricing Agreements (APAs)
The APA Scheme was introduced in the Income-tax Act in 2012 to provide a predictable and non-adversarial tax regime and to reduce litigation in case of transfer pricing. The ‘Rollback’ provisions were introduced in 2014. The scheme aims to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.
- Boost to economy and ease of doing business.
- Strengthen Government’s mission of fostering a non-adversarial tax regime.
- Introduces certainty in tax law by reducing compliance costs and make tax regime investment friendly.
- Provides certainty to taxpayers regarding transfer pricing to avoid disputes between taxpayer and tax regulator.
Categories: Business, Economy & Banking