Amid varying landscapes of taxation reforms, CBDT relatively inks 300th Advance Pricing Agreement

New Delhi, October 01: Waking ahead in the changing landscapes of the taxation reforms, the Central Board of Direct Taxes on Tuesday signed the 300th Advance Pricing Agreement in the month of September, marking a significant landmark of India’s seventh APA Programme.

 

 

"Three Advance Pricing Agreements were entered into in September, 2019, two of which being unilateral and one being bilateral, which has taken the total number of APAs signed by CBDT to 300. During the ongoing fiscal, the total number of APAs entered into has gone up to 29. The Bilateral APA signed in September, 2019 pertains to United Kingdom", the statement read.

 

The agreements entered into the month of September this year, pertain to various sectors of the economy like retail, garments, and consumer foods. "The international transactions covered in these agreements, inter alia, include provision of software development services, contract manufacturing, provision of IT enabled Services and provision of Support Services", it added.

 

An advance pricing agreement is an ahead of time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology for a set of transactions at issue over a fixed period of time. APAs are generally bilateral or multilateral i.e they also include agreements between the taxpayer and one or more foreign tax administrations under the authority of the mutual agreement procedure specified in income tax treaties.

 

The taxpayer benefits from such agreements since they are assured that income associated with covered transactions is not subject to double taxation by the IRS and the relevant foreign tax authorities. The APA scheme however, continues to make good progress in providing tax certainty to MNEs, further reflecting Centre's commitment towards fostering a non adversarial tax regime.