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India: Unilateral APA with taxpayer in travel sector

India: Unilateral APA with taxpayer in travel sector

The Central Board of Direct Taxes signed a unilateral advance pricing agreement (APA) involving complex transactions for a taxpayer operating in the travel industry.


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The key transactions that were resolved in the APA include travel industry-related collaborative transactions among group entities as well as certain intra-group services. Instead of agreeing upon a fixed price or margin, the APA provides—for the majority of covered transactions—a pricing methodology that takes into consideration industry dynamics and the taxpayer’s business model. 

KPMG observation

The APA is being viewed by transfer pricing professionals as evidence that the Indian APA authorities are willing to accept taxpayers' proposed methodologies while testing the profits earned by foreign affiliates. The APA officials exhibited a pragmatic and solution-oriented approach through the APA process.


Read an October 2017 report [PDF 476 KB] prepared by the KPMG member firm in India

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