Transfer pricing issues have been attracting the attention of the Indian Revenue authorities, and especially with respect to issues involving multinational enterprises (MNEs) operating within India. With a view to make India an “investor friendly” jurisdiction, the Government of India has made conscious efforts to reduce litigation and foster an environment of tax cooperation and certainty.
Accordingly, in line with the government’s efforts, the advance pricing agreement (APA) programme was introduced in 2012. The APA programme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.
Since the APA programme’s inception, there have been over 700 applications—both for unilateral and bilateral APAs—filed over a four-year period.
To date, over 120 APAs have been entered into—reflecting a rapid pace at which the tax authorities have been concluding APAs. The tax authorities anticipate more APAs to be concluded and signed in the near future.
To participate in a survey to measure taxpayer experiences and expectations on various parameters of the APA regime in India, click here [PDF 497 KB]
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