In a significant move India has signed its first ever bilateral Advance Pricing Agreement (APA).
Central Board of Direct Taxes (CBDT) signed a bilateral Advance Pricing Agreement (APA) with a Japanese Company, an official statement said.
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 Narendra Modi’s visit to Japan, this APA is expected to generate positive sentiments among Japanese investors in India.
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