The Central Board of Direct Taxes (CBDT) has released its fourth Annual Report on the Advance Pricing Agreement (APA) Programme, covering the fiscal years 2019-20, 2020-21, and 2021-22. APAs are pre-established agreements between taxpayers and tax administrations determining the Arm’s Length Price (ALP) of international transactions. The report highlights that during this period, a total of 150 APAs were entered into, with significant engagement from the IT, Banking & Insurance, and Engineering Services sectors. The Transactional Net Margin Method (TNMM) was the dominant approach for benchmarking, and the agreements involved associated enterprises from diverse countries, primarily the United States, United Kingdom, Australia, France, Germany, and Japan. Furthermore, while the majority of applications were unilateral, there were notable bilateral agreements, particularly with the USA, followed by the UK, Japan, and Singapore.
The Complete Advance Pricing Agreement can be accessed at: https://incometaxindia.gov.in/news/advance-pricing-agreement-apa-report.pdf