The tax department has signed four unilateral Advance Pricing Agreements (APAs) with taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.
The four APAs signed on Monday Feb 06,2017 pertain to the manufacturing, financial and information technology sectors of the economy.
The international transactions covered in these agreements include contract manufacturing, IT-enabled services and software development services, an official statement said.
With this, the total number of APAs entered into by the Central Board of Direct Taxes (CBDT) has reached 130 which includes eight bilateral APAs and 122 unilateral APAs, it added.
In the current financial year 2016-17, a total of 66 APAs (5 bilateral APAs and 61 unilateral APAs) have already been entered into.
- An advance pricing agreement (APA) is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology (TPM) for a set of transactions at issue over a fixed period of time (called "Covered Transactions")
- APAs are generally bi- or multilateral
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