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India: Unilateral APA addresses marketing, trading, and assembly activities

India: APA addresses marketing, trading, and assembly

A unilateral advance pricing agreement (APA) that covers three business activities—marketing service, trading, and assembly activities—of a U.S.-based multilateral corporation was recently signed.


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The APA concerns what is being described as the taxpayer’s complex business structure. It is being viewed as a significant development commensurate with the functional and economic profile of the taxpayer for each transaction, based on in-depth analysis of the facts and commercial considerations. 

The approach used for each transaction differed—some transactions were based on measuring an Indian entity's relevant sub-segment profit margin, while other transactions were measured on the profitability of foreign affiliates. The APA is also distinctive, in that it includes a reference to the hybrid compensation model (that is, as structured in the APA under specific facts).


Read an October 2017 report [PDF 489 KB] prepared by the KPMG member firm in India

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