Reports from India reveal that a taxpayer in the information technology (IT) / information technology enable services (ITES) sector has reached an advance pricing agreement (APA) with the tax authorities—thereby achieving some certainty and reducing the possibility of a transfer pricing dispute. This APA is reported to be one of the first involving a taxpayer in the IT-ITES sector.
India’s APA program was introduced by the Finance Act, 2012, effective 1 July 2012. Since then, taxpayers have filed over 550 applications for APAs (as of March 2015), with the majority of applications having been filed by taxpayers in the services sector, and specifically the IT-ITES sector.
The recently concluded APA may serve to encourage other taxpayers in the IT-ITES industry to consider the APA route.
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