New Delhi: The Central Board of Direct Taxes (CBDT) has signed a record number of 125 Advance Pricing Agreements (APAs) in the current fiscal year. This is 31% more APAs than were signed in the previous fiscal year, a PIB press release stated.
The 125 APAs include 86 Unilateral APAs (UAPAs) and 39 Bilateral APAs (BAPAs). The total number of APAs since the start of the APA programme has risen to 641, with 506 UAPAs and 135 BAPAs. In FY 2023-24, the CBDT also signed the highest number of BAPAs ever in any financial year.
These BAPAs were signed as a result of entering into bilateral agreements with India’s treaty partners such as Australia, Canada, Denmark, Japan, Singapore, the UK, and the US. The APA scheme aims to provide certainty to taxpayers in the international trade sector by specifying how international transactions should be priced and determining the arm’s-length price of these transactions for a maximum of five years.
The taxpayer also has the option to revise the APA for four preceding years, which provides them with tax certainty for nine years. The signing of bilateral APAs also safeguards taxpayers from any anticipated or real double taxation. The APA program has been instrumental in making India a more attractive destination for multinational businesses by enhancing ease of doing business.
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