Owing to Governments efforts to reduce litigation and bring certainty to the taxpayers, the Advance Pricing Agreement, APA, is considered the best suitable option under Transfer Pricing, revolutionizing the Indian Tax world. The unilateral and bilateral APA Scheme provides certainty in determining the arm’s length price of international transactions in advance for a maximum of five future years and four preceding years as a rollback option, i.e., in a total of 9 years.
APA in India
An APA is an agreement between the tax administration and a taxpayer with respect to Arm’s Length Price (ALP) or the method to calculate ALP in case of international transactions entered by the taxpayer with its associated enterprises. The APA programme, introduced over a decade ago, is a dispute resolution mechanism that has reduced the protracted transfer pricing litigations over the years and has given taxpayers across different sectors certainty regarding the pricing of cross-border transactions with their group entities. The APA program aims to promote an investor-friendly tax regime and a stable business environment in India.
Unilateral APA
- Strategic Tax Planning Our APA services empower you to plan and structure your international transactions proactively, ensuring compliance with Indian transfer pricing regulations. We help you achieve tax optimization while mitigating the risk of disputes.
- Comprehensive Documentation We assist in preparing comprehensive documentation to support your Unilateral APA application, ensuring that your pricing methodologies and transactions align with Indian regulatory standards.
- Tax Certainty Unilateral APAs provide you with the assurance of tax certainty in India. Our experts work diligently to secure agreement from Indian tax authorities, minimizing the risk of audits and adjustments.
Bilateral APA
- International Collaboration Bilateral APAs involve collaboration between India and the respective foreign tax authorities. Our services facilitate this collaboration and help you navigate the complexities of the process.
- Mitigating Double Taxation Bilateral APAs help prevent double taxation by ensuring that India and the foreign jurisdiction agree on the appropriate transfer pricing methods and pricing levels. We assist in securing consensus and resolving potential disputes between tax authorities.
- Operational Efficiency We streamline the Bilateral APA process, minimizing delays and ensuring that your cross-border transactions can proceed smoothly and without disruptions.
