In a major push towards ensuring tax certainty, the government is likely to conclude 30 to 40 more Advance Pricing Agreements (APAs) in the current fiscal.
The government has signed 22 APAs so far this fiscal, the Finance Ministry said in a release.
"Signing of APAs signals major push towards tax certainty. 22 APAs already concluded in the current fiscal while 30 to 40 APAs expected to be finalised before the end of the fiscal," it said.
APA, introduced in the Income Tax Act in 2012, provides for signing of an agreement between a taxpayer and the IT department on an appropriate transfer pricing methodology for determining the value of assets and ensuing taxes on intra-group overseas transactions.
The new momentum will go a long way in avoiding disputes, said the statement.
The Central Board of Direct Taxes (CBDT) has recently entered into 11 more APAs with Indian subsidiaries for foreign companies.
"In a major push towards providing certainty to foreign investors in the arena of transfer pricing, the CBDT signed these APAs operating in various segments of the economy," it said.
The agreements have been signed in areas like investment advisory services, engineering design services, marine products, contract R&D, software development services, IT enabled services, cargo handling support services.
Seven of these APAs have rollback provisions contained in them, while the other four are Agreements for the future five years only, it said.
APAs with rollback provisions can cover a maximum period of nine years in total. With this, the CBDT has so far entered into 31 APAs.
