Central Board of Direct Taxes (CBDT) on 3 August 2015 signed two unilateral Advance Pricing Agreements (APAs) with two Multi-National Companies (MNCs). The aim of the APAs is to user in an era of certainty in taxation.
This includes for the first time an APA with “Rollback” provision which means extending the tax certainty for nine financial years as against five years in APAs without “Rollback”.
With this, the CBDT has so far signed 14 APAs of which 13 are unilateral APAs and one is a bilateral APA. The 14 APAs signed relate to various sectors like telecommunication, oil exploration, pharmaceuticals, finance/banking, software development services and ITeS (BPOs).
What are APAs?
APAs are a means to settle transfer prices and of setting prices of international transactions in advance. There are two types of APAS, viz., unilateral APA and bilateral APA.
Unilateral APAs are those agreements that are agreed between Indian taxpayers and the CBDT, without involvement of the tax authorities of the country where the associated enterprise is based. On the other hand, bilateral APAs are those which include agreements between the tax authorities of the two countries.
Now get latest Current Affairs on mobile, Download # 1 Current Affairs App
When: 3 August 2015
DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.