New Delhi, Aug 30 (IANS) The Central Board of Direct Taxes (CBDT) on Tuesday signed 20 unilateral Advance Pricing Agreements (APAs) with taxpayers to provide certainty in the domain of transfer pricing.
The agreements were signed on Monday and Tuesday and many of these also have a “Rollback” provision in them, the finance ministry said in a statement here.
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 determining the arm’s length price of international transactions in advance for the maximum of five future years,” the statement said.
“Further, the taxpayer has the option to rollback the APA for four preceding years,” it said.
Since its inception, the APA scheme has attracted tremendous interest among multi-national enterprises and that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years.
The 20 APAs signed in these two days pertain to various sectors of the economy like Information Technology, Banking and Finance, Insurance, Human Resources, Pharmaceutical, Solar Energy, Oil and Gas, Foods and Beverages, Telecommunications and NGO.
With these signings, the total number of APAs entered into by the CBDT has reached 98 — including four bilateral APAs and 94 unilateral APAs.
A total of 33 unilateral APAs and one bilateral APA have already been concluded in five months of the current financial year as against 55 in 2015-16.