India’s Central Board of Direct Taxes (CBDT) entered into a further seven unilateral advance pricing agreements (APAs) in February 2018, taking the total number of APAs signed to 203.
The seven APAs pertain to the pharmaceuticals, automobiles, financial, and food and beverages sectors of the economy.
The international transactions covered in these agreements include manufacturing, provision of software development services, provision of information technology-enabled services, payment of royalty, provision of contract research and development services, provision of marketing support services, distribution, advertising, marketing, and promotion expenses, provision of engineering design support services, and provision of sourcing support services.
The APA provisions were introduced in the Income Tax Act in 2012, and “rollback” provisions were added in 2014.
The CBDT said: “The progress of the APA scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA program has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner. It has contributed significantly towards improving the ease of doing business in India.”