INDIA and Korea revised their DTAA on May 18, 2015 and the same entered
into force on September 12, 2016. Amongst other changes, the revised DTAA
incorporates para 2 in Article 9 (Associated Enterprises). Introduction of
Article 9(2) provides recourse to the taxpayers of both countries to apply for
Mutual Agreement Procedure (MAP) in transfer pricing disputes as well as apply
for Bilateral Advance Pricing Agreements (APA) for APA period beginning F.Y.
2017-18. Queries have been received from taxpayers regarding availability of
rollback provision in respect of bilateral APA applications for APA period
beginning F.Y 2017-18.
The
matter has been considered by CBDT. It is hereby clarified that applications for
bilateral APA involving international transactions with Associated Enterprises
in Korea for the APA period beginning F Y 2017-18 can be filed along with
request for rollback provision in prescribed form. Such requests for rollback
provision shall be processed in accordance with provisions of I T Act i.e.
section 92CC(9A) of Income Tax Act 1961, and the applicable Income Tax rules in
this regard. Inclusion of rollback provision in such bilateral APAs would also
be subject to the applicable regulations in Korea.
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