On 6 March 2017, India has signed a bilateral advance pricing agreement with the Indian subsidiary of a Japanese company, India’s Central Board of Direct Taxes (CBDT) has announced.
With this agreement, India and Japan have concluded five bilateral APAs, all of which include roll-back provisions. Overall, the CBDT has signed ten bilateral APAs and expects more APAs to be concluded and signed in the near future.
According to CBDT, all these five bilateral APAs are with Japanese trading companies (Sogo Soshas). Certainty in tax treatment for trading companies has been a long-standing demand of the Japanese industry. The bilateral signing of APAs in this sector provides tax certainty up to nine years in each of these cases.
