The Central Board of Direct Taxes (CBDT) has entered right into a file 125 Advance Pricing Agreements (APAs) in FY 2023-24 with taxpayers. Of this, 86 are Unilateral APAs (UAPAs) and 39 Bilateral APAs (BAPAs), the CBDT stated in a press release issued on Tuesday.
That is the highest-ever APA signings in any monetary 12 months because the launch of the APA programme. The variety of APAs signed in FY 2023-24 additionally represents a 31% enhance in comparison with the 95 APAs signed in the course of the previous monetary 12 months. With this, the full variety of APAs since inception of the APA programme has gone as much as 641, comprising 506 UAPAs and 135 BAPAs.
The APA Scheme endeavours to offer certainty to taxpayers within the area of switch pricing by specifying the strategies of pricing and figuring out the arm’s size value of worldwide transactions upfront for a most of 5 future years.
Additional, the taxpayer has the choice to rollback the APA for 4 previous years, on account of which, tax certainty is offered for 9 years. The signing of bilateral APAs moreover supplies the taxpayers with safety from any anticipated or precise double taxation. In 2013-14, which was the primary full monetary 12 months (as APAs turned operational in August 2012), solely 5 agreements had been signed by the CBDT.
Throughout FY 2023-24 CBDT additionally signed the utmost variety of BAPAs in any monetary 12 months until date. The BAPAs had been signed as a consequence of coming into into Mutual Agreements with India’s treaty companions particularly Australia, Canada, Denmark, Japan, Singapore, the UK and the US. Since then, the variety of APAs concluded yearly has been rising exponentially.
Bilateral APAs assist scale back the switch pricing disputes that come up in respect of worldwide transactions between associated corporations positioned within the two nations. Additionally, they’d lend certainty to worldwide transactions between associated corporations of the 2 nations.
The signing of bilateral APAs moreover supplies the taxpayers with safety from any anticipated or precise double taxation. CBDT in it is launch factors out that the APA programme has contributed considerably to the Authorities of India’s mission of selling ease of doing enterprise, particularly for MNEs which have a lot of cross-border transactions inside their group entities.
“The APA programme has contributed considerably to the Authorities of India’s mission of selling ease of doing enterprise, particularly for MNEs which have a lot of cross-border transactions inside their group entities. CBDT appreciates the taxpayers for his or her cooperative angle and for being equal companions on this programme,” CBDT stated within the word.
