The Central Board of Direct Taxes (CBDT) signed a bilateral Advance Pricing Agreement (APA) with a Japanese company on 19 December 2014. This is India’s first bilateral APA which has been signed for a period of 5 years.
Moreover, CBDT was proud to announce that this bilateral APA was finalized in the short time of one and half years, compared to the time it takes internationally in finalizing such APAs.
This bilateral APA appears to be in the case of Mitsui, which is one of the largest general trading companies of Japan operating in diverse businesses including infrastructure and energy. This APA will provide certainty to the company operating in India and avoid conflicts over sharing of taxes between India and Japan, thereby reducing transfer pricing disputes.
