India: A decade of the APA program; why it still makes sense

Overview of India’s APA program, including key benefits to taxpayers and some of the difficulties being addressed by tax authorities

Overview of India’s APA program

India in 2001 enacted transfer pricing legislation, as codified in the Income Tax Act, 1961. Within a decade of enactment, India came to be recognized as a jurisdiction with an extremely aggressive transfer pricing audit regime.

Although initially proposed in 2009, provisions governing the advance pricing agreement (APA) program were not enacted until 2012 when the Ministry of Finance introduced the APA program within Finance Act 2012. Given the aggressive positions being adopted and litigated by the Indian Revenue Authority, the decade of uncertainty regarding the status and fate of the APA program in India caused a lot of concern among large taxpayers. As such, the introduction of the APA program was celebrated by taxpayers.

Read a January 2022 report* [PDF 1.4 MB] prepared by professionals with KPMG’s Global Transfer Pricing Services that provides an overview of India’s APA program, including key benefits to taxpayers and some of the difficulties being addressed by tax authorities.

*This report originally appeared in the 10 January 2022 issue of Tax Notes International and is reprinted with permission.

 

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