India Signs First Bilateral Advance Pricing Agreement (APA)

India Signs First Bilateral Advance Pricing Agreement (APA) With A Japanese Company; APA Period is Five Years; APA Scheme Introduced to Bring About Certainty and Uniformity in Transfer Pricing Matters of Multi-National Companies and Reducing Litigation

Central Board of Direct Taxes (CBDT) signed here today a bilateral Advance Pricing Agreement (APA) with a Japanese Company. This is India’s first bilateral APA. The APA is for a period of five years. The APA has been finalized in a period of about one and a half years, which is shorter than time normally taken in finalizing APAs internationally. The APA scheme has been introduced to bring about certainty and uniformity in transfer pricing matters of multi-national companies and reducing litigation. APAs will improve investment climate in the country. In the context of growing economic ties between Japan and India, especially after the Prime Minister Shri Narendra Modi’s visit to Japan, this APA is expected to generate positive sentiments among Japanese investors in India.