Tax dept inks seven new transfer pricing pacts
As part of efforts to reduce tax disputes related to international transactions carried out by multinationals, the Indian Tax Department has signed seven new unilateral Advance Pricing Agreements (APAs), taking the total number of such pacts to 39. Of the total 39 APAs, 38 are unilateral and one is bilateral. “In the current fiscal year, which is the third year of APA programme, 30 agreements have been signed so far. Before the end of the financial year, more such agreements are expected to be signed,” the Finance Ministry said in a statement on Friday. The seven new APAs signed on Friday cover sectors like investment advisory, software development & IT enabled services and manufacturing. The initiative of forging advanced pricing agreements with countries and individual firms was launched in 2012 with an aim to provide certainty to taxpayers with respect to transfer pricing by specifying methods of fixing prices of international transactions in advance. Over the past few months, India has signed a number of international tax agreements with countries like Switzerland, Japan, Slovakia and Turkmenistan. In the last week of December 2015, the Union Cabinet had approved signing of an agreement with Slovenia seeking amendments in the Double Taxation Avoidance Treaty (DTAT) between India and the European Union country. A similar agreement for amendment in the existing tax treaty was also signed between India and Japan in December when both sides agreed for exchange of information on tax matters, including bank information and information without domestic tax interest, through internationally accepted standards. In November, the cabinet had approved an amendment in the DTAC signed between India and Turkmenistan in 1997 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income and on capital.
January 23, 2015 | 1:25pm IST.