CBDT signs four unilateral Advance Pricing Agreements
Posted on:07 Feb 2017 18:09:04
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07 February 2017 Current Affairs: The Central Board of Direct Taxes (CBDT) under the Department of Revenue, Union Ministry of Finance has entered into four more unilateral Advance Pricing Agreements (APAs).
These four APAs are related to Manufacturing, Financial and Information Technology sectors. They cover international transactions such as Contract Manufacturing, Software Development Services and IT Enabled Services.
With this, the total number of APAs entered into by the CBDT has reached 130. It includes 122 Unilateral APAs and 8 bilateral APAs.
In the current financial year (2016-17), total 66 APAs (5 bilateral APAs and 61 unilateral APAs) were signed.
Advance Pricing Agreements (APAs) : The APA Scheme was introduced in the Income-tax (IT) Act in to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and determining prices of international transactions in advance.
The Rollback provisions under this scheme were introduced in 2014. The scheme seeks to foster government’s aim of non-adversarial tax regime.
Benefits: (i) Boost to economy and ease of doing business. (ii) Strengthen Government’s mission of fostering a non-adversarial tax regime. (iii) Introduces certainty in tax law by reducing compliance costs and make tax regime investment friendly. (iv) Provides certainty to taxpayers regarding transfer pricing to avoid disputes between taxpayer and tax regulator.
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