On February 7, 2018, the Indian tax authority announced that it entered into two bilateral advance pricing agreements (APAs) in the month of January 2018.
The two bilateral agreements include the first bilateral APA with the US. The Indian tax authority also signed five unilateral APAs last month.
The seven APAs pertain to various sectors of the economy such as banking, insurance, investment advisory, information technology (IT), chemicals, and engineering. The international transactions covered in these agreements include provision of IT-enabled services, provision of software development services, contract manufacturing, payment of royalty, and sale of goods.
So far, the Indian tax authority has entered into 18 bilateral APAs and 178 unilateral APAs. In addition to the US, India has entered into bilateral APAs with Japan, the Netherlands, and the UK.
The Central Board of Direct Taxes 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.”