The Central Board of Direct Taxes (CBDT) of India signed 174 Advance Pricing Agreements (APAs) with Indian taxpayers during the 2024-25 fiscal year, marking the highest number of APAs signed in a single year since the beginning of the program. Sixty-five of these were bilateral APAs, resulting from mutual agreements with countries such as Australia, Japan, South Korea, the Netherlands, New Zealand, Singapore, the United Kingdom, and the United States.
This achievement underscores India’s commitment to improving the business environment and facilitating operations for multinational companies involved in cross-border transactions.
What Are Advance Pricing Agreements (APAs)?
APAs are contracts between taxpayers and tax administrations to agree in advance on methodologies, prices, or profit margins for transactions among related parties. They can be unilateral, bilateral, or multilateral, depending on the number of jurisdictions involved.
APAs’ Relevance
These agreements provide legal certainty to taxpayers, reduce Transfer Pricing litigation, and ensure that international transactions are at the Arm’s Length Principle. In addition, they facilitate cooperation among tax administrations, promoting transparency and mutual trust.
Conclusion
The record achieved by India in signing APAs during the fiscal year 2024-25 reflects a global trend toward seeking greater certainty and transparency in international transactions. Companies operating in multiple jurisdictions should consider negotiating APAs to ensure regulatory compliance and reduce tax risks.
At TPC Group, we have Transfer Pricing experts who can advise you on negotiating and entering into Advance Pricing Agreements customized to your specific needs. Contact us for further information and ensure the tax stability of your international operations!
Source: Social News