Indian Authorities Sign Two New APAs
India’s Central Board of Direct Taxes (CBDT) on October 6 announced that it entered into two unilateral Advance Pricing Agreements (APAs) in September.
The new APAs bring the number of such agreements signed to date to 177, comprising 164 unilateral APAs and 13 bilateral APAs. During the current financial year, a total of 25 APAs (two bilateral and 23 unilateral) have been signed so far.
The two APAs signed in September relate to taxpayers in the automobile and healthcare consulting sectors and the provision of IT-enabled services, software development services, and engineering design services.
India’s relatively new APA scheme is intended to provide certainty to taxpayers in the area of intra-group transfer pricing. The CBDT said it achieves this “specifying the methods of pricing and determining the arm’s length price of international transactions in advance for a maximum period of five future years.” In addition, taxpayers can request that the APA apply for the preceding four years.
