New Delhi: The Central Board of Direct Taxes (CBDT) has signed two more unilateral advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.
The two APAs signed earlier this month pertain to sectors like chip design or development of embedded software and information technology (software development).
One of these agreements also have a 'Rollback' provision in them, a finance ministry statement said.
The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the arm's length price of international transactions in advance for the maximum of five future years.
Further, the taxpayer has the option to rollback the APA for four preceding years, as a result of which, total nine years of tax certainty is provided. Since its inception, the APA scheme has attracted tremendous interest among Multi National Enterprises, the statement said.
So far this fiscal, four APAs have been signed and the CBDT expects more APAs to be signed in the near future, the statement added.
"The progress of the APA Scheme strengthens the government's commitment to foster a non-adversarial tax regime....