CBDT signs two Advance Pricing Agreements
The Central Board of Direct Taxes (CBDT) has entered into 2 Bilateral Advance Pricing Agreements (APAs) in November 2017. These two agreements are first ever Bilateral APAs with Netherlands.
These two APAs pertain to Electronics and Technology sectors of economy. It also covers international transactions that include Distribution, Provision of Business Support Services, Provision of Marketing Support Services etc.
With this, the total number of APAs entered into by CBDT has gone up to 186. This includes 171 Unilateral APAs and 15 Bilateral APAs.
Advance Pricing Agreements (APAs)
The APA Scheme was introduced by Government in 2012 to give tax certainty to MNCs that agree on certain principles in valuation of their cross-border transactions. They also provide assessees with alternate dispute resolution mechanism with respect to transfer pricing. It also helps in determining arm’s length price of international transactions in advance for maximum period of five future years. The rollback provision to pull out of it was introduced in 2014. The progress of APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime.
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Month: Current Affairs - December, 2017