IN a major push towards providing certainty
to foreign investors in the arena of transfer pricing, the Central Board of Direct
Taxes has entered into 11 more unilateral Advance Pricing Agreements (APAs).
These APAs were signed with Indian subsidiaries of foreign companies operating
in various segments of the economy like investment advisory services, engineering
design services, marine products, contract R&D, software development services,
IT enabled services, cargo handling support services, etc.
While
seven of these APAs have rollback provisions contained in them, the other
four are Agreements for future five years. APAs with rollback provisions
can cover a maximum period of nine years in total. With this round of signing,
CBDT has so far entered into 31 APAs (30 unilateral and one bilateral).
The
APA programme was introduced in the Income-tax Act, 1961 in 2012 vide
the Finance Act, 2012. 5 APAs were concluded in the first year and 4
APAs got signed in the second year. The pace of negotiations has picked
up in the current year. This year has already witnessed the conclusion
of 22 APAs. It is the aim of the CBDT to finalise another 30 to 40 APAs
before the end of this fiscal to provide stability and confidence to
foreign enterprises operating in India.
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