The Central Board of Direct Taxes (CBDT) has accomplished a landmark achievement by finalizing a record 125 Advance Pricing Agreements (APAs) during the fiscal year 2023-24 with Indian taxpayers. This figure includes 86 Unilateral APAs (UAPAs) and 39 Bilateral APAs (BAPAs), marking the highest number of APA signings in any financial year since the inception of the APA programme.

The significant increase of 31% in the number of APAs signed in FY 2023-24, compared to the preceding financial year’s 95 APAs, underscores the growing adoption and effectiveness of this initiative. With this latest round of agreements, the total number of APAs executed under the programme has reached 641, comprising 506 UAPAs and 135 BAPAs.

Notably, during FY 2023-24, the CBDT also finalized the highest number of Bilateral APAs in any financial year to date. These BAPAs were established through Mutual Agreements with India’s treaty partners, including Australia, Canada, Denmark, Japan, Singapore, the UK, and the US.

The APA Scheme aims to provide taxpayers with certainty in the domain of transfer pricing by specifying pricing methods and determining the arm’s length price of international transactions in advance for up to five future years. Moreover, taxpayers have the option to apply the APA retrospectively for four preceding years, ensuring tax certainty for a comprehensive period of nine years. The signing of bilateral APAs further shields taxpayers from potential or actual instances of double taxation.

The success of the APA programme aligns with the Government of India’s mission to enhance the ease of doing business, particularly benefiting Multinational Enterprises (MNEs) engaged in a substantial number of cross-border transactions within their group entities. The CBDT acknowledges and appreciates the cooperative attitude of taxpayers, considering them as equal partners in advancing this initiative.