India, Britain sign 3 three Bilateral APAs including international transactions
The Dollar Business Bureau
India and Britain have inked three more Bilateral Advance Pricing Agreements (APAs) as a result of an understanding that was reached between the competent authorities of the two countries sometime back. This has taken the total number of APAs signed - both bilateral and unilateral - so far to 111.
According to a statement by the Finance Ministry, The Central Board of Direct Taxes (CBDT) signed three APAs covering international transactions in the nature of payment of intra-group service charges pertaining to the telecom industry. They also have a roll-back provision.
With the fixing of these pacts, India and the UK have completed five bilateral APAs with some more expected to conclude in the near future. The total number of bilateral APAs concluded so far by the Central Board of Direct Taxes (CBDT) is seven.
Prior to this agreement, the Competent Authorities of the two countries exchanged mutual agreements under the Mutual Agreement Procedure (MAP) Article of the India-UK Double Taxation Avoidance Convention (DTAC).
The government had introduced the Advance Pricing Agreement (APA) Programme under the Finance Act, 2012 to provide a predictable and non-adversarial tax regime. The idea was also to decrease the litigation in the Indian transfer pricing arena. The Bilateral Advance Pricing Agreements can be inked for a maximum of five years at a time.
The statement also sheds light on the fact that since the notification of the APA scheme on 30.08.2012, a total of about 700 APA applications have been received during the first four years of the programme. This goes on to reflect the wide acceptance of the APA programme by the taxpayers.