The Central Board of Direct Taxes (CBDT) entered into two more unilateral Advance Pricing Agreements (APAs) on 27th April, 2017, with Indian taxpayers.
An advance pricing agreement (APA) is an agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology for a set of transactions for a fixed period of time. APA’s can be unilateral or bilateral.
Since introduction, more than 800 applications (both unilateral and bilateral) having been filed in just five years.
The 2 APAs signed pertain to Information Technology and Banking & Finance sectors of the economy. The international transactions covered in these agreements include Software Development services, IT enabled services and KPO services.
With these, the total number of APAs entered into by the CBDT has reached 154. This includes 11 bilateral APAs and 143 unilateral APAs. The approach and functioning of the officers in the APA teams have been appreciated in India and abroad.