CBDT Inks 7 Advance Pricing Agreements to Cut Tax Lawsuit [ Current News (Concise) ]
Central Board of Direct Taxes (CBDT) has signed seven one-sided Advance Pricing Agreements (APAs) with Indian taxpayers to reduce tax lawsuit. Number of APAs entered into by CBDT. So, CBDT has reached 77 APAs.
- 3 bilateral APAs
- 74 unilateral APAs.
Latest 7 APAs signed with taxpayers related to various sectors like:
- Information technology
The international transactions covered in these agreements include:
- Software development Services
- IT enabled Services
- Some of these APAs have rollback provisions and these provisions are introduced in 2014.
About Advance Pricing Agreements (APAs):
- APA Scheme was introduced in the Income-tax Act in 2012. As per the provisions of the Income Tax Act, 1961.
- APA generally signed between a taxpayer and the central tax authority (in case of India it is CBDT).
- APAs provide an appropriating transfer pricing methodology for defining the value of assets and taxes on intra-group external transactions.
- Reducing obedience costs and makes tax rule investment friendly for that it seeks to introduce certainty in tax law.
- Scheme efforts to provide certainty to taxpayers to setting the prices of international transactions in advance.
- That aims to avoid conflict between taxpayer and tax regulator.
- In case of Indian perspective, APAs seeks to give:
- It is referred to the setting of the price for goods and services sold between related legal subsidiaries within an enterprise.
- Legal subsidiaries considered under the control of a single corporation include branches and companies that are fully or majority owned finally by the parent corporation.
- Published on: July 20, 2016