sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Direct Tax »
 Income Tax Return (ITR) filing alert! These errors are in your ID? Do this ASAP or you will be trapped
 TDS deduction under section 194A of the Income-tax Act, 1961 in case of Senior Citizens
 Income Tax payers alert! ITR filing process set to witness unprecedented change – What CBDT chairman has confirmed
 ITR forms will soon be pre-filled for you: CBDT’s Sushil Chandra
 I-T dept working on pre-filled income tax return forms, says CBDT chief Sushil Chandra
 Big changes coming, will tax rates be cutIncome tax return
 Notification No. 78/2018 - Customs Central Board Of Indirect Taxes And Customs
 CBDT allows taxman to widen certain 'limited scrutiny' cases
 New direct tax code won’t change income tax slabs, rates
 If tax is paid offline by physical challan, bank can make certain corrections
 Govt moves to redraft direct tax laws to modernize income tax

CBDT seals more than 100 advance pricing agreements
September, 26th 2016

The APA scheme, introduced in the Income Tax Act in 2012, is aimed at providing certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

The Central Board of Direct Taxes (CBDT) on Friday said it has entered into five unilateral advance pricing agreements (APAs) with Indian taxpayers. One of these agreements has a rollback provision in it. With these signings, the total number of advance pricing agreements entered into by the CBDT has reached 103, the finance ministry said in a statement.

The APA scheme, introduced in the Income Tax Act in 2012, is aimed at providing certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. These agreements allow MNC units to declare a value for their transactions with their overseas parents, under the rules prescribed by India, and avoid audit or questioning by Indian authorities for five years. As for bilateral APAs, the tax authorities in the home country of the MNCs could accept the taxes paid in India by the Indian unit as a valid business expenditure, negating the chances of double taxation.

Without naming the companies that have signed the advance pricing agreements on Friday, the finance ministry said that they pertain to diverse sectors such as information technology, sourcing services and investment advisory services. The 103 APAs signed so far include four bilateral APAs and 99 unilateral APAs. A total 39 APAs have been concluded in six months of the current financial year.

The profitability of contract research and development centres set up in India by global IT and IT-enabled services firms has been a major area of dispute between them and the Indian tax department. Based on its internal benchmarks of industry averages and median industry price, the department demanded higher taxes by ascribing higher profitability to such units.

It had, for instance, attributed about 30-40 per cent profitability to contract research units, while the firms claimed to have eked out much less.
The higher estimates of profit margin allowed the taxman to revise upwards the value of the service rendered by the captive Indian units to its overseas parent, in what could inflate the tax liabilities of these units.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multi-level Marketing MLM India Affiliate Marketing Affiliate Marketing Software MLM Software MLM Solutions Multi level marketing solutions MLM Servi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions