CBDT inks Bilateral Advance Pricing Agreement
The Central Board of Direct Taxes (CBDT) has entered into a Bilateral Advance Pricing Agreement (BAPA) on the with Indian subsidiary of a Japanese trading company.
Earlier, CBDT also had modified an existing Bilateral APA with another Indian subsidiary of a Japanese company to include rollback provisions. Thus, total three BAPAs have been signed by CBDT with Indian subsidiaries of Japanese companies all including rollbacks. With this total number of BAPAs entered into by CBDT is now eight.
What is Advance Pricing Agreement (APA)?
The APA Scheme was introduced in the Income Tax (IT) Act, 1961 in 2012 and the provisions related to rollback were introduced in 2014. It strengthens Government’s mission of fostering a non-adversarial tax regime. It endeavours 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. Under BAPA, certainty in tax treatment is provided for the next 5 years while rollback provides dispute redressal for a maximum of four past years preceding APA years.
Categories: India Current Affairs 2017