What is Advance Pricing Agreements of Income Tax India — Tax parley

The Central Board of Direct Taxes (CBDT) has released the fifth annual APA report on September 1, 2023. The report highlights the achievements of the APA programme in the financial year 2022–23.

One of CBDT’s key efforts for advancing an investor-friendly and non-adversarial tax system in India is the Advance Pricing Agreement (APA) program. Since its start, the Indian APA program has made a substantial contribution to the government of India’s objective to advance business accessibility.

The fourth and fifth annual APA reports have just been made available by the Central Board of Direct Taxes (CBDT). The reports include important facts and figures on the APA program. These include the applicants’ industry of employment, the types of transactions handled, the transfer pricing techniques used, etc.

The status of applications submitted up until March 31, 2023, is included in the fifth report. The figures are current as of Financial Year (FY) 2022–2023 at this time. The report examines many APA program accomplishments from FY 2022–2023 in detail. With the signature of a total of 95 APAs in FY 2022–23, CBDT set a record for the most APAs ever signed in a fiscal year since the APA program’s inception.

The fifth report contains information on the standing of applications submitted up through March 31, 2023. The numbers are current as of the current financial year (FY) 2022–2023. The paper carefully reviews several APA program successes during FY 2022–2023. The CBDT achieved a record for the most APAs ever signed in a fiscal year since the APA program’s start with the signing of a total of 95 APAs in FY 2022–23.

Here are some of the key highlights of the report:-

1. The CBDT recorded the highest ever APA signings in any financial year since the launch of the APA programme, signing a total of 95 APAs.
2. The CBDT also signed 32 Bilateral Advance Pricing Agreements (BAPAs) in FY 2022–23, being the maximum number of BAPAs in any financial year till date. This figure is more than double the previous signing record of 13 BAPAs in any financial year.
3. The largest number of single day signings with a total of 21 APAs signed, recorded on 24th March, 2023.
4. The APA programme has been successful in providing certainty to taxpayers in relation to their transfer pricing practices.
5. The APA programme has also helped to reduce litigation and disputes between taxpayers and the tax authorities.

With a total of 21 APAs signed on March 24, 2023, a record for the most APAs signed in a single day in the program’s history was also set. The 400th Unilateral Advance Pricing Agreement (UAPA) and the 500th APA were also signed this year, marking significant milestones. The document is accessible at:

Click Here to Read Final APA Report 2023

Originally published at https://taxparley.com on September 2, 2023.