The Central Board of Direct Taxes (CBDT) has entered into 62 Advance Pricing Agreements (APA), which seek to provide certainty to taxpayers in the field of transfer pricing through an agreement in advance, in the financial year 2021-22, the Union Finance Ministry said on Thursday.
The agreements include 13 bilateral APAs (consequent to Mutual Agreement between India and its treaty partners) and 49 unilateral APAs. With this, the total number of APAs since the inception of the APA programme has gone up to 421.
The Advance Pricing Agreement (APA) scheme came into effect on 30th August 2012. The scheme endeavours to provide certainty to taxpayers in the field of transfer pricing through an agreement in advance.
Such agreement is entered into by the CBDT with the approval of the Central Government, with the taxpayers on the transfer price of international transactions between associated entities.
Despite the severe economic and social disruption caused by the COVID-19 pandemic in the first part of the financial year, the number of APAs signed compares very well with the APAs signed in the preceding two years (31 APAs in FY 2020-21 and 57 APAs in FY 2019-20), the Finance Ministry said in a statement.
"The progress of the APA scheme strengthens the Government's resolve of fostering a non-adversarial tax regime and increasing the ease of doing business in India. CBDT appreciates the cooperative and transparent attitude of taxpayers in this regard," the ministry said.
(With inputs from ANI)