THE
Central Board of Direct Taxes (CBDT) has entered into seven Unilateral
Advance Pricing Agreements (APAs) today. Some of these agreements also have
a “Rollback” provision in them.
The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback”
provisions were introduced in 2014. The scheme 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. Since
its inception, the APA scheme has attracted tremendous interest and that has
resulted in more than 700 applications (both unilateral and bilateral) having
been filed in just four years.
The
seven APAs signed today pertain to various sectors of the economy like banking,
Information Technology and Automotives. The international transactions covered
in these agreements include software development Services, IT enabled Services
(BPOs), Engineering Design Services and Administrative & Business Support
Services.
With
today’s signings, the total number of APAs entered into by the CBDT has reached
77. This includes three bilateral APAs and 74 Unilateral APAs. In the current
financial year, a total of 13 Unilateral APAs have been entered into so far.
The progress of the APA Scheme strengthens the Government’s mission of fostering
a non-adversarial tax regime. The CBDT expects more APAs to be concluded and
signed in the near future.
|