The Central Board of Direct Taxes (CBDT) has entered into a record 125 Advance Pricing Agreements (APAs) in FY 2023-24 with Indian taxpayers.
About
This marks the highest ever APA signings in any financial year since the launch of the APA programme in 2012.
During FY 2023-24 CBDT also signed the maximum number of Bilateral APAs in any financial year till date.
The BAPAs were signed as a consequence of entering into Mutual Agreements with India’s treaty partners namely Australia, Canada, Denmark, Japan, Singapore, the UK and the US.
An advance pricing agreement (APA) is a formal arrangement between a tax authority and a multinational enterprise (MNE) in which the parties jointly agree on the MNE’s transfer pricing methodology, estimated taxable income, and tax payments for a fixed period, thus reducing the likelihood of an income tax dispute.
The APA program addresses actual or potential disputes and provides tax certainty to MNCs by allowing them to negotiate how profit margins for India operations will be calculated.
