New Delhi: 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 yesterday 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, a total of 66 APAs (5 bilateral APAs and 61 unilateral APAs) have already been entered into.
The statement said the CBDT expects more APAs to be concluded and signed before the end of the current fiscal. The APA scheme was introduced in the Income-tax Act in 2012 and the "rollback" provisions were introduced in 2014.
The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the prices of international transactions in advance, the statement said.