India signs record-breaking 95 Advance Pricing Agreements in FY 2022-23

The Central Board of Direct Taxes (CBDT) achieved a milestone by entering into 95 Advance Pricing Agreements (APAs) in FY 2022-23, setting a new record. The agreements include 63 Unilateral APAs (UAPAs) and 32 Bilateral APAs (BAPAs), bringing the total number of APAs since the program's inception to 516.

This year saw the highest number of APA signings in any financial year and the largest number of BAPAs, which were a result of Mutual Agreements with treaty partners like Finland, the UK, the US, Denmark, Singapore, and Japan. Additionally, the program witnessed the highest number of single-day signings, with 21 APAs signed on March 24, 2023.

The APA Scheme aims to provide certainty in transfer pricing by specifying pricing methods and determining arm's length prices for international transactions for up to five future years. The taxpayer has the option to rollback the APA for four preceding years, offering tax certainty for nine years. Bilateral APAs also protect taxpayers from potential or actual double taxation.

The APA program significantly supports the Government of India's mission to promote ease of doing business, particularly for multinational enterprises with numerous cross-border transactions within their group entities. CBDT acknowledges the taxpayers' cooperative attitude and their partnership in the program.

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