income tax
In a notable advancement for India’s tax environment, the Central Board of Direct Taxes (CBDT) has successfully signed 125 Advance Pricing Agreements (APAs) during the fiscal year 2023-24. This achievement underscores the importance of transfer pricing regulations and the ongoing commitment to enhancing taxpayer certainty.
The signing of 125 APAs in FY 2023-24 marks a historic milestone for the CBDT, representing a significant increase from the previous financial year. This total includes:
This uptick demonstrates a robust focus on transfer pricing, aligning with global best practices.
The CBDT has notably expanded its number of BAPAs, reinforcing partnerships with essential treaty nations, including:
These agreements not only streamline international transactions but also help reduce the risk of double taxation, offering crucial reassurance to multinational enterprises (MNEs).
The APA Scheme plays a vital role in ensuring both predictability and transparency in transfer pricing. Key features include:
This framework supports effective tax planning and compliance for taxpayers navigating cross-border operations.
The APA programme's benefits extend beyond compliance, aligning with the Government of India’s broader initiative to improve the ease of doing business, especially for MNEs. By providing a resolution mechanism for transfer pricing disputes, the programme fosters a favorable investment climate and enhances India’s overall attractiveness as a business destination.
The CBDT’s record achievement in signing APAs during FY 2023-24 indicates its dedication to creating a taxpayer-friendly environment while preserving tax system integrity. The growing adoption of APAs builds confidence among taxpayers and reinforces India’s reputation as an investment-friendly jurisdiction. To maintain this positive trajectory, continued efforts to refine transfer pricing regulations and boost administrative efficiency will be essential for achieving sustainable economic growth.
The CBDT has confirmed the signing of 125 APAs during FY 2023-24, contributing to a cumulative total of 641 APAs since the programme's inception, which includes 506 UAPAs and 135 BAPAs. The 31% increase in APAs from the previous year reflects ongoing success in this initiative. The programme's focus on clarity regarding pricing methods not only enhances tax certainty for a total of nine years but also promotes ease of doing business within India.